May 2026: BLS April Inflation

The U.S. Bureau of Labor Statistics released its inflation report
for April on May 12^th.

April Inflation Summary:

The BLS reported Annual Inflation was up 0.5% from March’s 3.3%, to 3.8% in April. When we look at it to 2 decimal places, we see it rose even more, i.e., from 3.26% to 3.81% (or 0.55%).

The CPI Index rose from 330.213 to 333.020
Monthly Inflation for April 2026 was 0.85%, up from 0.31% in April 2025.
Next release June 10^th, 2026

Annual Inflation Table

	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec
2026	2.39%	2.41%	3.26%	3.81%
2025	3.00%	2.82%	2.39%	2.31%	2.35%	2.67%	2.70%	2.92%	3.01%	NA	2.74%	2.68%
2024	3.09%	3.15%	3.48%	3.36%	3.27%	2.97%	2.89%	2.53%	2.44%	2.60%	2.75%	2.89%
2023	6.41%	6.04%	4.98%	4.93%	4.05%	2.97%	3.18%	3.67%	3.70%	3.24%	3.14%	3.35%

BLS Commentary:

“The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.6 percent on a seasonally adjusted basis in April, after rising 0.9 percent in March, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all-items index increased 3.8 percent before seasonal adjustment. The index for energy rose 3.8 percent in April, accounting for over forty percent of the monthly all-items increase. The shelter index also increased in April, rising 0.6 percent. The index for food increased 0.5 percent over the month as the index for food at home rose 0.7 percent, and the index for food away from home increased 0.2 percent… The index for all items less food and energy rose 0.4 percent in April.”

Factors Driving Current Inflation

The War in the Middle East has closed the Straits of Hormuz, disrupting Oil flows. This is a totally different type of inflation than one induced by FED money printing.

The closure of the Strait of Hormuz represents a supply-side shock, fundamentally different in nature from demand-side monetary inflation. When the Fed expands the money supply, inflation is driven by too many dollars chasing the same goods; it’s a broad, diffuse phenomenon that erodes purchasing power across the economy and is more systemic. The Hormuz closure, by contrast, physically removes a critical input from the global economy, spiking energy costs that cascade through the economy but can be short-lived if the supply is restored quickly. Raising interest rates in response to this kind of inflation is counterproductive, since it strangles the demand side of an economy already being strangled on the supply side. This risks creating stagflation, i.e., the toxic combination of rising prices and a stagnant economy.

BLS Inflation Components:

Looking at Table A below, we can see that on an annual basis, energy is up sharply with very few mitigating sectors.

Oil Prices (WTI Crude)

February Oil prices averaged $61.01
March Oil prices averaged $88.23
In April, Oil averaged $94.60 with wild swings in both directions.

See: Historical Oil Prices Chart and Tables for more info.

April 2026 FED Summary:

The Federal Reserve kept the target range for the federal funds rate unchanged at 3.50%–3.75% at its April meeting. In an unusual vote, the decision was heavily split (8-4 vote). Governor Stephen Miran dissented, preferring a ¼% cut in rates. The three other dissenters, however, took the opposite view and didn’t even want the FED to hint that easing was a possibility.

However, the FED might be forced to cut rates or print more money, due to the economic fallout of the war’s increased spending. Historically, wars force the FED’s hand, whether it causes inflation or not.

For more see: FED Monetary Policy and Inflation.

1 Month MIP Inflation Prediction vs. Actual:

Unfortunately, the MIP is unable to predict events like wars, pandemics, and political theater, so it drastically underestimated March inflation. April, however, fared much better with our MIP projecting a sharp increase and the actual falling between our “Most Likely” and “Likely High”

Go here to view our current MIP projection.

Inflation Chart

Monthly Inflation Compared to Previous Years:

The monthly inflation rate for April 2026 was 0.85% compared to 1.05% in March 2026 and 0.31 a year ago.

See: Monthly Inflation Rate for more information and a complete table of Unadjusted Monthly Rates.

Misery Index

Unemployment 4.30% + Inflation 3.81% = 8.11%

This month, inflation is up sharply again, and unemployment is unchanged, so the misery index rose from 7.56% to 8.11%. It is still considerably below June 2022, when the index was at 12.66%.

Rate of Change

The NYSE ROC chart generated a BUY signal in January.

The NASDAQ ROC generated a BUY signal back in September.

Both BTC and ETH have generated Sell Signals. BTC in August, about a month prior to the all-time high. ETH generated a sell signal in November.

For more information, see: Crypto ROC.

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