By Nathalie Voit

Inflation in April decelerated from its 8.5% pace in March. However, the Labor Department said prices still remain near a 40-year high.

Prices for goods and services surged 8.3% from one year ago. The department’s Bureau of Labor Statistics said the Consumer Price Index increased 0.3% after advancing 1.2% in March. April’s reading showed inflation slightly cooling from its record growth rate in March but still well above the Federal Reserve’s ideal target rate.

Excluding volatile food and energy prices, “core” inflation climbed 6.2%. CNBC said economists surveyed by Dow Jones had projected a rise of 6.0%.

Airfare prices continued their sharp upward trend to reach 18.6% in April, the index’s largest monthly increase since the start of the series in 1963. The category rose 33.3% over the past year. The medical care index jumped 3.2% over the last 12 months. The shelter index also advanced another 0.5% to hit 5.1% yearly, its fastest pace since April 1991.

New vehicle prices spiked 1.1% to 13.2% in the twelve months ending in April, while used vehicle prices declined 0.4% for the month. The index is up 22.7% over the past year. Meanwhile, prices for apparel fell 0.8% in April but are still 5.4% higher than one year ago.

In terms of energy, prices remain elevated at 30.3% despite decreasing 2.7% over the month. On a 12-month basis, the food index rose 9.4% in April after increasing 0.9%. The bureau said this was the index’s largest annual increase since April 1981.

The CPI gains arrived despite falling energy prices, including a 6.1% drop in the cost of gasoline. Pump prices nonetheless remain severely bloated at 43.6%.

“We’re starting to see energy pull back a little bit, but it’s not enough,” chief fixed-income strategist at Charles Schwab Kathy Jones said, according to CNBC. “The markets were hoping for a better number, and it’s not good enough to rule out more Fed tightening.”

The recent price gains have taken a toll on workers’ earnings. Real wages adjusted for inflation decreased 0.1% last month despite a 0.3% increase in average hourly earnings. Over the past year, real earnings have fallen 2.6%, even though median hourly wages are up 5.5%.