A key U.S. inflation gauge slowed last month as President Donald Trump’s tariffs have yet to noticeably push up prices, while American incomes jumped.
Friday’s report from the Commerce Department showed that consumer prices rose just 2.1 percent in April compared with a year earlier, down from 2.3 percent in March and the lowest since September. Excluding the food and energy categories, core prices rose 2.5 percent from a year earlier, below the March figure of 2.7 percent. Economists track core prices because they typically provide a better read on where inflation is headed.
The figures show inflation is still declining from its post-pandemic spike, which reached the highest level in four decades in July 2022. Economists and some business executives have warned that prices will likely head higher as Trump’s tariffs take effect, though the timing and impact of those duties are now in doubt after they were struck down late Wednesday in court.
On a monthly basis, overall prices and core prices both increased just 0.1 percent from March to April.
At the same time, incomes — before adjusting for inflation — rose a healthy 0.8 percent. Much of that gain reflected an increase in Social Security benefits for some retired teachers, fire fighters, and federal workers whose incomes previously weren’t fully counted toward Social Security benefits.
The inflation-fighters at the Federal Reserve said at their most recent meeting on May 6 and 7 that inflation is still elevated, compared to their target of 2 percent. Fed officials, who focus more on core prices, broadly support keeping their key interest rate steady while they evaluate the impact of the tariffs on inflation and jobs.
Consumer spending rose 0.2 percent in April from March, the report said, but that’s down from the big 0.7 percent rise in March.
The Western Journal has reviewed this Associated Press story and may have altered it prior to publication to ensure that it meets our editorial standards.
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