By Christopher Rugaber, Associated Press Economics writer
Washington (AP) – A closely watched inflation gauge was cooled last month in a sign that prices were regularly offset before most of President Donald Trump’s prices were implemented.
At the same time, consumers have accelerated their expenses, especially for cars, probably in order to get ahead of tasks.
The Wednesday report of the Commerce Department showed that consumer prices increased by 2.3% in March compared to the previous year, compared to 2.5% in February. Excluding the volatile categories of food and energy, the basic prices increased by 2.6% compared to a year ago, below 2.8% of February. Economists follow the basic prices because they generally offer better reading on the direction of inflation.
The slowdown in inflation could be a temporary respite until the widespread tasks imposed by Trump begin to advance prices in many categories. Economists predict that inflation could reverse its recent decline and reach 3% or more by the end of this year.
Wednesday’s report also showed that consumer spending increased 0.7% from February to March, a healthy gain. A large part of this increase seems to be motivated by efforts to get ahead of the rights, such as the 25% rights of Trump on imported cars, which took effect on April 3.
Expenditure on cars increased by 8.1% in March, the government said. But spending on restaurants and hotels also jumped after falling in February, a sign that Americans are always ready to make a little trip and restaurant.
Car sales increased last month while consumers and businesses accelerate acquisitions to get ahead of prices. This means that car sales can fade in the coming months because these assets have already been obtained.
Earlier Wednesday, the government said that consumer spending had slowed down in the first three months of the year, compared to the last quarter of last year, when bad weather depressed purchases and the Americans took a break after healthy spending during the winter holidays.
The country’s economy actually decreased by 0.3% during the January-March quarter, imports, while companies were trying to get ahead of Trump’s prices.
Trump benefited from last year’s election from a large dissatisfaction with voters on the high price increase which started in 2021 and which, on average, increased prices by around 25% in the middle of last year. Grocery costs have increased by almost 30%. As a candidate, Trump said he would immediately lower prices if it was elected.
However, the president sorted 25% of duties on steel and aluminum, as well as cars, and a tariff of 10% on almost all other imports. And China, the third trade partner in the United States, is now faced with an obligation of 145% on its exports.
The federal reserve inflation combatants target an inflation rate of 2% and pay particular attention to the inflation gauge on Wednesday, known as the price of personal consumer expenditure. The best-known consumer price index was published earlier this month and also showed a constant drop.
Trump prompted the Fed to reduce its short -term short -term interest rate because inflation has cooled. But the president of the Fed, Jerome Powell, stressed that the central bank is likely to remain on the sidelines while the civil servants assess the impact that the prices will have an impact on the economy. The Fed should not lower its rate at its political meeting next week.
Originally published:
California Daily Newspapers
