The consumer price index rose 0.3 per cent in April after advancing 0.4 per cent in March and February, the Labor Department's Bureau of Labor Statistics (BLS) said on Wednesday.
In the 12 months through to April, the CPI increased 3.4 per cent after climbing 3.5 per cent in March. Economists polled by Reuters had forecast the CPI gaining 0.4 per cent on the month and advancing 3.4 per cent year-on-year.
The annual increase in consumer prices has dropped from a peak of 9.1 per cent in June 2022, though progress has stalled. Inflation accelerated in the first quarter amid strong domestic demand after moderating for much of 2023.
Last month's slowdown was a relief after data on Tuesday showed a jump in producer prices in April.
Economists say inflation is being driven by providers of services like motor vehicle insurance, housing and health care catching up to higher costs.
They expect inflation pressures to ebb this quarter and prices to gradually move toward the Federal Reserve's 2 per cent target as the labour market is cooling.
That sentiment is shared by Fed Chair Jerome Powell who said on Tuesday, "I expect that inflation will move back down ... on a monthly basis to levels that were more like the lower readings that we were having last year."
Financial markets expect the US central bank to start lowering borrowing costs in September.
A handful of economists anticipate the Fed will commence its easing cycle in July, while another minority believes a rate cut could come in December, if at all.
The central bank early in May left its benchmark overnight interest rate unchanged in the current 5.25 per cent to 5.50 per cent range, where it has been since July. The Fed has raised its policy rate by 525 basis points since March 2022.
Excluding the volatile food and energy components, the CPI rose 0.3 per cent in April after advancing 0.4 per cent in March. In the 12 months through April, the core CPI increased 3.6 per cent. That was the smallest year-on-year gain since April 2021 and followed a 3.8 per cent increase in March.