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American inflation has slowed down at its lowest rate in more than four years, an unexpected and welcome development at a time when the considerably degenerate prices of President Donald Trump should lead to an increase in prices.
Consumer prices increased by 0.2% last month, bringing the annual inflation rate to 2.3%, unexpected cooler reading than the 2.4% increase observed in March, according to the latest data on the consumer price index published Tuesday by the Bureau of Labor Statistics.
This is the lowest annual rate since February 2021.
However, what was a year of one year to the progress of post-pandemic inflation should not last.
“At first glance, IPC report figures are good news for consumers: food prices being down, some air trips being slightly cheaper, things like people like to see in the economy,” said Tyler Schipper, an associate professor in economics and data analysis at St. Thomas University in St. Paul, Minnesota. “These prices are still there, they are always at levels that we have not seen for a very long time, and there are good explanations to explain why we should not necessarily see price increases.”
Among these reasons: there have been significant changes in pricing policy, and some of the most aggressive tasks have been reduced or interrupted; Purchases of companies with frontal loaded, strengthening their pre-tariff inventory; And certain costs of the initial waves of new prices may have been absorbed by retailers and manufacturers.
And with regard to inflation data, all pricing effects would probably emerge for the first time on goods (where certain categories have shown price jumps); However, any increase that has been offset by inflation of more soft services, including areas where lower consumers’ demand could increase prices.
“This can be the low point (for the IPC) in 2025,” said Ben Ayers, principal economist on Tuesday. “While the tariff costs are operating more and more in consumer prices, we expect a leap in the ICC this summer, pushing annual reading greater than 3%. Similarly, economic growth should be soft during the rest of the year, because higher prices and economic concerns weigh on expenditure activity. ”
And although the prices have been rare in Tuesday IPC data, not only was indications that prices can be built, but the report has also shown signs of the way in which massive economic uncertainty has weighed on consumers.
Economists expected the IPC to increase by 0.3% compared to March and be stable to 2.4% for the 12 months finished in April, according to Factst.
Consumers obtained a certain relief from the grocery store, where prices dropped by 0.4% compared to March, which lowered the overall prices by 0.1%.
Egg prices dropped by 12.7% for the month, reflecting the decreases observed on the large side while the industry is starting to recover from fatal access to avian flu. The average price of a dozen grade eggs has increased from $ 6.23 to $ 5.12, show BLS data.
Each year, egg prices increased by 49.3%.
“Maybe Egggate’s worst has passed,” said Schipper at CNN Business.
Food and energy (which increased by 0.7% compared to March) are two of the areas where consumers most often meet inflation; However, they are also the most volatile and the most affected by temporary events such as weather, war, illness, rumbles of the supply chain and oscillations.
The basic CPI gauge, which removes food and energy, increased 0.2% compared to March and remained at an annual rate of 2.8%, according to Tuesday’s report.
However, the report also showed the “first clear proof of upward pressure” on prices for prices of prices, noted Samuel Tombs, American chief economist for the macroeconomics of the Pantheon.
The prices of goods excluding food, energy and cars increased by 0.2%, exceeding the average zero of the last 12 months, he wrote in a note to investors. Furniture and household appliances jumped by 1% and the prices of computers and the telephone increased by 0.3%, an average reversal of 0.6% in the previous 12 months, he added.
In addition, the well -documented dives of consumer confidence weighed on the prices of discretionary services last month, in particular for air transport, which dropped by 2.8% in April after having recorded decreases of 5.3% and 4% in March and February, respectively.
“The very low level on Google’s research for sentences, including” flights “in April … suggests that booking and prices will remain moderate in May,” he wrote.
This story develops and will be updated.
