Inflation has cooled for the third consecutive month in April, even after some of President Donald Trump’s prices entered into force, although economists and many business owners expect inflation to increase in the coming months.
Consumer prices increased by 2.3% in April compared to a year ago, the Department of Labor announced on Tuesday, compared to 2.4% in March and the smallest increase in more than four years.
On a monthly basis, prices increased modestly, increasing by 0.2% from March to April after dropping 0.1% the previous month, the first decrease in five years.
The prices of the grocery store fell 0.4% from March to April in what will be a relief for many people who extend family budgets for the bases. It was the greatest drop in food costs at home since September 2020, the government said.
Egg prices fell sharply, down 12.7%, the 41 years old. However, there are still 49% higher a year ago.
The report suggests that the prices have not yet had an impact on the prices of many articles. The clothing costs dropped from 0.2% from March to April, while the prices of the new car were unchanged. Furniture costs have, however, jumped 1.5%.
Excluding the volatile categories of food and energy, the basic prices were also silent, which increased by 2.8% in April compared to a year ago, the same as in March. On a monthly basis, they increased a slight 0.2%. Economists look at the basic prices because they generally offer a better reading on the price direction.
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Only certain early prices imposed by Trump were in force in April, including 25% of steel and aluminum rights and 25% on certain imports of Canada and Mexico. The 20% of Trump’s initial imports on goods from China were also in place. Steel and aluminum tasks will take time to assign consumer products, such as cars, and may not affect retail prices for months.
Trump announced a universal tariff of 10% which entered into force on April 5. Its huge 145% import taxes on Chinese goods were reduced to 30% in an agreement announced on Monday.
However, economists say that average rates are now about 18%, about six times higher than before Trump has taken up and higher in about 90 years.
The goods which were already in transit when the prices were imposed will not be subject to tasks. Many companies have built a stock of goods and could keep price increases in the hope that the trade war will cool.
However, some companies have increased prices and others said they planned to do so following functions. Mattel Inc., the car manufacturer Barbie Dolls and Hot Wheels, said earlier this month that he should increase prices on certain products to compensate for prices. The company holds 40% of its products in China.
Stanley Black & Decker tool manufacturer said they had increased prices in April and planned to do so again in the quarter-September quarter due to higher rates. And the leaders of Procter & Gamble, the consumer products giant that manufactures household names such as Crest toothpaste, Tide detergent and Charmin toilet paper, said last month that it will have to transmit higher prices to consumers from July.
Consumer prices cooled cooled up in February and March, which prompted Trump to say several times on social networks that there is “no inflation”. Inflation fell to nearly the target of 2% set by the Federal Reserve, the agency responsible for combating higher prices.
Small import taxes on Chinese products will limit damage to the American economy, but combined with all other prices, economists provide that they will always slow growth this year and aggravate inflation.
The Yale Budget LAB, for example, estimates that prices will increase prices by 1.7% and cost the average cleaning around $ 2,800 this year.
And although Trump can praise his commercial transactions – like that of the United Kingdom who has come down last week – he also said that “prices are the most beautiful word” in the dictionary, and count on homework income to reduce budget deficit, which suggests that the prices will probably remain high.
The prices also put the federal reserve in an extremely difficult location, as recognized by President Jerome Powell at a press conference last week. Powell said the tasks have increased the risk of higher inflation and higher unemployment, two challenges that rarely occur simultaneously. If unemployment increased, the Fed would generally reduce rates to stimulate the economy, while inflation was getting worse, the central bank would generally increase rates or leave them high.
& Copy 2025 the Canadian press