A key U.S. inflation gauge slowed last month, with President Donald Trump’s tariffs yet to noticeably push up prices, and American incomes jumped, the Associated Press reports.
Friday’s report from the Commerce Department showed that consumer prices rose just 2.1% in April compared with a year earlier, down from 2.3% in March and the lowest since September. Excluding the volatile food and energy categories, so-called “core” prices rose 2.5% from a year earlier, below the March figure of 2.6%. 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 widespread tariffs take effect, though the timing and impact of those duties are now in doubt after they were struck down late Wednesday in court.
At the same time, incomes — before adjusting for inflation — rose a healthy 0.8%. 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.
Consumer spending rose 0.2% in April from March, the report said, but that’s down from the big 0.7% rise in March.
