May 16, 2022

Rate of Inflation Slowed in April But Remains High

The rate of inflation slowed slightly to 0.3 percent in April, down from a 1.2 month-to-month increase in March, but remains a major concern for businesses.

To combat the high levels of inflation, the Federal Reserve raised interest rates by half a percentage point earlier this month, the largest hike since 2000. However, the U.S. Chamber of Commerce noted that inflation is likely to continue for the time being. “The Fed’s actions to curb inflation – higher interest rates and selling its holdings of securities – will bring inflation own, but it will take several more months to see its effects,” wrote Curtis Dubay, senior economist for the Chamber.

In the meantime, business advocacy groups are looking for lawmakers to take a more direct approach. “Inflation is happening because too much money is chasing too few goods – it’s economics 101,” said Neil Bradley, executive vice president and chief policy officer for the U.S. Chamber. “While the Federal Reserve focuses on the demand side through raising rates to cool the economy, only the administration and Congress can address the policy sides affecting inflation – workforce, energy, and tariffs are three key places to start.

“The U.S. economy has 11.5 million open jobs, but three million fewer workers than if labor force participation was equal to the pre-pandemic level. Getting people back to work and expanding legal immigration are key to taming inflation,” he continued.

Elsewhere, businesses are calling on lawmakers to make investments to boost U.S. energy production and to cut tariffs. “While the Federal Reserve focuses on the demand side through raising rates to cool the economy, only the administration and Congress can address the policy sides affecting inflation – workforce, energy, and tariffs are three key places to start,” the U.S. Chamber said.