Inflation Rises Slightly in April Amid Early Tariff Effects

Inflation in the U.S. showed a modest increase in April, with the Consumer Price Index rising 0.2% from March and 2.3% over the year, marking the lowest annual rate since early 2021. This slight uptick came amid the initial effects of President Donald Trump's tariffs, including 25% duties on steel, aluminum, and some imports from Canada, Mexico, and China, though many economists believe the full inflationary impact of these tariffs has yet to materialize. While prices for groceries and gasoline declined, increases in housing costs, natural gas, and electricity contributed to the overall rise. Core inflation, which excludes volatile food and energy prices, rose 0.2% monthly and 2.8% annually, indicating ongoing underlying price pressures. Economists warn that the tariffs could lead to higher prices and affect business hiring and expansion, though current trade negotiations and tariff adjustments introduce uncertainty. Despite some economic contraction in the first quarter linked to pre-tariff import stockpiling, consumer spending remains robust, and recession risks appear to be diminishing.