April 24, 2025
WASHINGTON (AP) — U.S. inflation declined last month as the cost of gas fell, a sign that price growth is cooling.
Consumer prices rose just 2.4% in March from a year earlier, the Labor Department said Thursday, down from 2.8% in February. That is the lowest inflation figure since September.
Excluding the volatile food and energy categories, core prices rose 2.8% compared with a year ago, down from 3.1% in February. That is the smallest increase in core prices in nearly four years. Economists closely watch core prices because they are considered a better guide to where inflation is headed.
On a monthly basis, prices actually fell 0.1% in March, the first monthly drop in nearly five years. The cost of used cars, car insurance, and hotel rooms all fell. Core prices rose just 0.1% in March from February.
The cost of groceries, however, jumped 0.5% last month, the report showed, as egg prices leapt 5.9% to a new record average price of $6.23 a dozen.
Trump had imposed sweeping tariffs on nearly 60 nations last week, which sent financial markets into a tailspin and caused sharp drops in business and consumer sentiment. Yet on Wednesday he paused those duties for 90 days. He kept a steep 125% tariff on all imports from China and 25% duties on steel, aluminum, imported cars, and many goods from China and Mexico.
Last week, Federal Reserve Chair Jerome Powell said that the central bank was likely to keep its key interest rate unchanged at about 4.3% as it waited to see how Trump's policies impacted the economy. Trump called for the Fed to cut rates on Friday.
“There’s a lot of waiting and seeing going on, including by us,” Powell said. “And that just seems like the right thing to do in this period of uncertainty.”
