The pace of inflation in the U.S. slowed in April, just as President Donald Trump announced sweeping “liberation day” tariffs on major U.S. trading partners. According to the latest report from the Bureau of Labor Statistics (BLS), the annual inflation rate eased to 2.3%, down slightly from 2.4% in March.
Core inflation, which excludes food and energy prices, also cooled to an annual rate of 2.3%, down from 2.4% in the previous month. While the data reflects prices in April, economists note that businesses are still evaluating the full impact of Trump’s newly announced tariffs.
Though Trump has since rolled back many of the tariffs introduced in early April—announcing trade deals with the UK and China—imports from China still face a 30% levy, and most other goods entering the U.S. remain subject to a 10% tariff. These developments have left consumers wary of potential price hikes.
Consumer sentiment fell sharply in April, as measured by the University of Michigan’s Survey of Consumers. Inflation expectations surged to 6.5%, the highest level since 1981. A Harris/Guardian poll released Monday found that 60% of Americans have delayed a major financial goal due to the current economic climate, underscoring the widespread anxiety.
Wall Street, however, responded more optimistically. Stocks climbed sharply on Monday following news of a 90-day pause in Trump’s tariff standoff with China. Still, markets appear to be more sensitive to changes in trade policy than consumer sentiment.
Many economists warn that the worst may be yet to come. Because much of what is currently sold was imported before the tariffs took effect, price increases are expected to accelerate in the months ahead. Federal Reserve officials acknowledge the risk.
“Certainly the risk to higher inflation [and] higher unemployment have increased,” Fed Chair Jerome Powell said last week, adding that the tariffs could postpone the Fed’s inflation target of 2% by a year. “We would, at least for the next, say, year, not be making progress toward those goals if that’s the way tariffs shake out.”
This outlook contrasts with Trump’s public messaging. Despite being in office for over three months, Trump maintains that any inflation is the result of policies from the Biden administration.
“DRUG PRICES TO BE CUT BY 59%, PLUS!,” Trump posted on social media Monday. “Gasoline, Energy, Groceries, and all other costs, DOWN. NO INFLATION!!!”
