Inflation is no longer a temporary problem confined to food and energy. Instead, it's turning into a permanent problem extending to several items that are included in the basket of the typical U.S. consumer, like shelter and services.

According to new data released by the Bureau of Labor Statistics, the Consumer Price Index (CPI), a measure of the cost of living across the U.S., rose at an annual rate of 8.3% in April, slightly below the 8.5% in March. However, core inflation, which excludes the volatile food and energy component from calculations, rose 6.2%. That's a significant change from the previous reports, meaning that inflation is now spreading beyond food and energy.

The April inflation numbers are changing the narrative, according to Paul Kutasovic, a professor of finance at the New York Institute of Technology.

"The release of April's CPI report essentially ended the narrative that inflation is temporary and will ease soon," Kutasovic told International Business Times. "Headline CPI for April moderated a bit and raised hope that the overall inflation rate is peaking, but core inflation rose sharply and is red hot.

"Prices are now rising across a broad range of goods and services. Of concern, [housing] costs rose monthly by 0.6% and overall services by 0.7."

What's behind the broadening of the inflation problem?

A tight labor market.

"The problem, as the Fed noted last week, is that the labor market remains super tight with labor force participation falling and wages rising," said Kutasovic. "The Fed needs to move aggressively and raise rates by 75 to 100 basis points at each of the next two meetings. With 2-year Treasuries at 2.7%, a federal funds rate of 1% is simply unreasonable. The Fed needs to move quickly before the inflation problem becomes an affordability crisis and inflationary expectation becomes ingrained."

Gabe Krajicek, CEO of financial services company Kasasa, is on the same page.

"The urgency facing the Fed is clear in this month's CPI data, as trends continued higher and the fundamentals of housing costs, wage demands and supply chain disruptions showed no signs of slowing throughout the first quarter," Krajicek told IBT. "Rising prices and inflation are causing consumers to dip further into their lines of credit. In addition, they are more hesitant to buy big-ticket purchases like housing, autos and washing machines. Moreover, inflation is a problem that compounds over time, and even high-income individuals aren't insulated."

Inflation could push the economy into a recession, as consumers must cut down spending to balance their books.

"Consumers are becoming more cognizant of their spending habits and readjusting to allow their finances to meet new prices," said Krajicek.

That's not a good prospect for equities as we saw a sell-off on Wall Street following the release of the April inflation numbers.