Eggs and milk prices fall, fueling new hope for interest rate cuts

Inflation slowed last month, offering a note of relief to cash-strapped shoppers after three months of bigger-than-expected price increases.

Consumer prices in April were up 3.4% from a year ago, according to the Labor Department, a smaller annual increase than the month before. The cost of living rose 0.3% between March and April. Rising rents and gasoline prices were partially offset by falling prices for groceries, including household staples such as eggs and milk.

"Core" inflation, which strips out volatile food and energy prices, was 3.6% in April — the lowest reading in three years.