US Consumer Price Index Surprises with 2.3% Inflation Rate, Lowest in Four Years
April's inflation rate signifies a decline, reflecting significant economic trends and tariff impacts.
The Consumer Price Index (CPI) in the United States saw a year-on-year moderation, recording a rate of 2.3% in April, a decrease of one-tenth from March and marking the lowest rate since February 2021, as reported by the Bureau of Labor Statistics (BLS).
This figure is lower than analysts' forecasts, who had anticipated the CPI would reflect the impacts of the tariff war initiated by former President Donald Trump, which included a recent agreement with China to suspend tariffs, reducing rates from 145% to 30% in pursuit of a lasting trade deal.
On a month-to-month basis, inflation increased by 0.2% in April, following a decline of 0.1% in March, potentially indicating the early influence of the tariffs on pricing.
The housing index rose by 0.3% in April, contributing significantly to the monthly price increase.
When examining core inflation, which excludes the volatile food and energy prices, the rate remained stable at 2.8%, matching the same figure from March and considered the lowest level since March 2021.
The energy index experienced a 0.7% increase in April, driven by higher prices for natural gas and electricity, which countered the decline in gasoline prices.
Conversely, food prices decreased by 0.1% in April after a 0.4% increase in March, marking the most significant decline in this category since September 2020.
This decrease was attributed to a 0.4% decline in household grocery items, primarily due to a notable 12.7% decrease in egg prices.
Furthermore, prices for meats, poultry, fish, and eggs fell by 1.6% in April, reversing increases seen in previous months.
Other areas that saw price increases in April included household furnishings, healthcare, motor vehicle insurance, education, and personal care products.
Meanwhile, categories that experienced price decreases month-over-month included airfares, used cars and trucks, and clothing.
Last week, the Federal Open Market Committee (FOMC) decided to keep interest rates unchanged within the range of 4.25% to 4.5%, where they have remained since the rate cut in December 2024.
This figure is lower than analysts' forecasts, who had anticipated the CPI would reflect the impacts of the tariff war initiated by former President Donald Trump, which included a recent agreement with China to suspend tariffs, reducing rates from 145% to 30% in pursuit of a lasting trade deal.
On a month-to-month basis, inflation increased by 0.2% in April, following a decline of 0.1% in March, potentially indicating the early influence of the tariffs on pricing.
The housing index rose by 0.3% in April, contributing significantly to the monthly price increase.
When examining core inflation, which excludes the volatile food and energy prices, the rate remained stable at 2.8%, matching the same figure from March and considered the lowest level since March 2021.
The energy index experienced a 0.7% increase in April, driven by higher prices for natural gas and electricity, which countered the decline in gasoline prices.
Conversely, food prices decreased by 0.1% in April after a 0.4% increase in March, marking the most significant decline in this category since September 2020.
This decrease was attributed to a 0.4% decline in household grocery items, primarily due to a notable 12.7% decrease in egg prices.
Furthermore, prices for meats, poultry, fish, and eggs fell by 1.6% in April, reversing increases seen in previous months.
Other areas that saw price increases in April included household furnishings, healthcare, motor vehicle insurance, education, and personal care products.
Meanwhile, categories that experienced price decreases month-over-month included airfares, used cars and trucks, and clothing.
Last week, the Federal Open Market Committee (FOMC) decided to keep interest rates unchanged within the range of 4.25% to 4.5%, where they have remained since the rate cut in December 2024.
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