'Core' inflation just jumped the most since 1982 - here's what that means

• Core inflation, which excludes volatile food and energy prices, leaped the most since 1982 in April.
• The jump underscores how supply shortages and bottlenecks hindered firms' ability to meet surging demand.
• Economists still expect such inflation to cool as supply chains heal and production rebounds.

The Bureau of Labor Statistics' latest inflation report includes many superlatives.

The Consumer Price Index posted its largest most month-over-month jump since 2009. Its year-over-year increase was the largest since 2008, and used vehicle prices soared the most on record, dating all the way back to 1953.

But core inflation - a better tool for measuring bottlenecks in the manufacturing sector - also jumped at a rate not seen in decades. The gauge soared 0.9% last month, marking the largest one-month climb since 1982.

Core inflation measures price growth for an index of items that excludes food and energy, which tend to see more violent price swings. Within the core group, prices for shelter, airline tickets, recreation, car insurance, and home furniture all drove the April surge, according to the report.

Economists anticipated such price growth as the economy nears full reopening after more than a year of lockdowns. The Federal Reserve has said for months that reopening will likely drive a period of strong inflation, but that price growth would return to healthy levels soon afterward.

The April pickup in core inflation underscores this, as it shows many firms struggling with supply shortages as reopening brings a level of demand not seen for more than a year. Manufacturers reported last month that supply-chain disruptions and massive order backlogs hindered their ability to meet rebounding demand. Others raised concerns that the bottlenecks would boost production costs and spark dangerous inflation.

"In 35 years of purchasing, I've never seen anything like these in terms of extended lead times and rising prices," one business in the plastics and rubber sector told the Institute of Supply Management in April.

The supply constraints aren't relegated to any one sector, either. Prices for basic materials ranging from lumber to palm oil rose as several industries tried to quickly boost production through the month. Climbing commodity prices typically bleed into production costs and, eventually, the prices consumers pay at the register.

A criticism on the right and parts of the center-left is that Democrats' $1.9 trillion stimulus package is excessive in juicing the economic recovery, but Fed Chair Jerome Powell has said stronger inflation will likely be temporary.

"Inflation dynamics do change over time, but they don't change on a dime," Powell said during a February Senate hearing. "We don't see how a burst of fiscal support or spending, that doesn't last for many years, would actually change those inflation dynamics."

JPMorgan backed up such an outlook on Wednesday, saying the burgeoning inflation spike will prove to be "largely transitory." The bank's economists see core inflation rising above 2% in 2021 as price pressures linger. The Fed's low-rate policy stance will allow inflation to run hot for some time, but easing strains across the US manufacturing industry should cut down on price growth, the team led by Bruce Kasman added.