As businesses and consumers anxiously awaited the implementation of President Donald Trump’s broad tariffs, US consumer inflation moderated last month due to falling gas costs, according to official statistics released on Wednesday.
The US leader abruptly changed direction on all countries except China on Wednesday after announcing duties of up to 50% on imports from some last week, which sent global markets plunging and bond yields skyrocketing.
The Labor Department said in a statement that the consumer price index (CPI) cooled to 2.4 percent in March compared to a year earlier, which was lower than economists’ projections, ahead of the sharp market fluctuations that accompanied those taxes.
In fact, monthly inflation decreased by 0.1 percent over the previous month.
In a statement, the Labor Department explained the modest monthly price reduction by stating that “the index for energy fell 2.4 percent in March, as a 6.3-percent decline in the index for gasoline more than offset increases in the indexes for electricity and natural gas.”
In March, the food index increased by 0.4%.
With volatile food and energy prices excluded, inflation increased by 2.8 percent over the previous 12 months and by 0.1 percent in March compared to the previous month.
According to the Labor Department, this was “the smallest 12-month increase since March 2021.” Additionally, it fell short of the Wall Street Journal and Dow Jones Newswires’ median forecasts of economists.
