Consumer inflation in the United States decreased last month, primarily due to significant reductions in gasoline prices, as revealed in government data released on Wednesday. This development occurred as both consumers and businesses anticipated the potential impact of comprehensive tariffs announced by President Donald Trump.
The previous week, President Trump declared tariffs of up to 50 percent on imports from certain countries, resulting in a downturn in stock markets and an increase in bond yields. However, on Wednesday, he reversed this decision for all countries except China.
Prior to these market fluctuations triggered by the tariffs, the consumer price index (CPI) dropped to 2.4 percent in March compared to the previous year, according to the Labor Department. This figure was lower than what economists had predicted. Monthly inflation showed a slight decline of 0.1 percent from February.
According to the Labor Department, “The index for energy fell 2.4 percent in March, as a 6.3-percent decline in the index for gasoline more than offset increases in the indexes for electricity and natural gas.” This statement provided an explanation for the minor monthly price reduction.
The food index experienced a rise of 0.4 percent during March. When excluding the often volatile categories of food and energy, inflation saw a modest rise of 0.1 percent compared to the previous month and increased by 2.8 percent over the last 12 months. This was noted as “the smallest 12-month increase since March 2021,” according to the Labor Department. Additionally, these figures were below the median estimates by economists from Dow Jones Newswires and the Wall Street Journal.