By Christopher Rugaber, Associated Press Economics writer
Washington (AP) – American inflation decreased last month while the cost of gas dropped, a sign that price growth was cooling even if President Donald Trump increased his pricing threats.
Consumer prices only increased by 2.4% in March compared to the previous year, the Department of Labor announced Thursday, compared to 2.8% in February. This is the lowest inflation figure since September.
Excluding the volatile categories of food and energy, the basic prices increased by 2.8% compared to a year ago, against 3.1% in February. It is the lowest increase in basic prices in almost four years. Economists closely look at basic prices because they are considered a better guide to inflation management.
The report shows that inflation is mainly cooled for now. However, President Donald Trump’s huge prices on China and 10% of universal homework should increase prices in the coming months, according to economists. Higher import taxes will also weigh growth.
On a monthly basis, prices actually dropped by 0.1% in March, the first monthly drop of almost five years. The cost of used cars, car insurance and hotel rooms has all dropped. Basic prices only increased by 0.1% in March from February.
The cost of the grocery store, however, jumped 0.5% last month, according to the report, because egg prices left 5.9% for a new average record price of $ 6.23 per dozen.
Trump had imposed radical prices on nearly 60 countries last week, which sent financial markets to a fall and caused a clear drop in commercial and consumers. However, Wednesday, he stopped these functions for 90 days. He kept a high price of 125% on all imports from China and 25% of steel, aluminum, imported cars and many goods from China and Mexico.
The remaining rates are always likely to raise inflation this year, say economists, even with the 90 -day break.
Even with the break, many companies are always uncertain where commercial policy will then go. Trump has also said that pharmaceutical imports will be imposed.
Consumers will probably see certain prices increase due to existing tasks, including massive prices on China. The United States imports more than $ 60 billion in iphones and other mobile phones from China every year, as well as massive amounts of clothing, shoes and toys.
Many American companies will likely withdraw the production of China, a process that had already started during Trump’s first term when he slapped some of his exports. However, China remains the third trading partner in the United States.
The displacement of China’s supply chains will probably take time and come with its own costs, which could increase prices for American consumers in the coming months.
Last week, the president of the federal reserve, Jerome Powell, said that the Central Bank was likely to maintain its key interest unchanged at around 4.3% when he was waiting to see how Trump policies had an impact on the economy. Trump called on the Fed to reduce rates on Friday.
“There is a lot of expectations and seeing taking place, including us,” said Powell. “And it seems to be the right thing to do in this period of uncertainty.”
Originally published:
California Daily Newspapers
