The United States CPI rose 0.2% intermensual in April, below what was expected by the market, said Tuesday of the Labor Department. The March data had shown a variation of -0.1%.
A reuters poll among analysts had planned that the figure would rise 0.3%in April. In the comparison with the same month of the previous year, The consumer price index rose 2.3%, after an increase of 2.4%in March.
The IPC report highlights two underlying dynamics in the economy. The categories of goods exposed to higher tariffs, Like new cars and clothing, they did not experience the price increases that economists anticipated. This suggests that importers and retailers are absorbing part of additional costs, and imported products that are sold now arrived before they entered into force Most tariffs, specifically about China.
Besides, a certain weakness in categories of services such as trips and recreation suggests that consumers are cutting the expenditure on leisure and other discretionary expenses.
The temporary agreement reached over the weekend to reduce the commercial war escalation with China has largely reduced projections on the impact of tariffs on the economy. While several economists claim that the United States is likely to avoid a recessiontariffs will maintain inflation well above the objective of the Central Bank.
The 90 -day extension —A measure that reduced the combined American tariffs of 145% on most Chinese imports to 30%– It suggests some relief. However, if the recovery period to replenish the offer generates congestion in the ports, this could accelerate the increase in IPC prices, according to Bloomberg Economics.
A reuters poll among analysts had planned that the interannual figure would rise 2.4%in April.
The underlying IPC (A price index that excludes fresh foods and energy due to its high volatility) climbing 2.8%, identical variation to that experienced in March.
Analysts had foreseen that The underlying rate would rise 2.8%in April. March’s underlying data had shown a level of 0.1%.
Inflation in the United States increased less than expected in April in the midst of moderate prices of new clothing and cars, which suggests little urgency so far by companies to transfer the cost of higher tariffs to consumers.
The consumer price index, excluding food and energy categories, often volatile, increased 0.2% compared to March, according to data from the Office of Labor Statistics published on Tuesday. This marked the third consecutive month with readings lower than those planned.
Even with reduction, American importers still fight with higher commercial costs and fear they can increase again when the pause is over.
The limited impact of tariffs could be observed in the so -called basic goods prices, which exclude food and energy and barely increased in Aprilaccording to IPC data.
“We could find ourselves at an optimal point at this time for the trends of underlying inflation. The prices of underlying goods still do not reflect the impact of the tariff increases implemented since February, while the inflation of the services continues to gradually decrease,” said Brian Coulton, chief economist of Fitch Ratings, in a note. “It is likely that the underlying inflation of the assets will rebound in the coming months as the inventories of imported goods prior to the tariff increases are exhausted.”
The S&P 500 opened upwards, the treasure bonds extended their rebound and the dollar fell behind the data.
Given the extreme uncertainty about the evolution of tariffs and their final impact on the economy, the Federal Reserve keeps interest rates without changes in the predictable future. Inflation data, although moderate, support bets on at least two rate cuts this year.
Companies such as Nintendo and Procter & Gamble have suggested that they will try to transfer the cost of tariffs to consumers. However, the scope of its price fixing power is not clear as the demand is slowed. Consumer spending on retail sales data – which mainly capture goods spending – probably remained unchanged in April, waiting for a report that will be published on Thursday.
In other CPI data, the prices of the groceries experienced their greatest fall since 2020, weighed with the greatest drop in the price of eggs since 1984. However, the prices of furniture and appliances – you mostly imported well – fired.
What Bloomberg Economics says
The report shows that the impact of Trump’s tariff policy on inflation should be considered together with the indirect impact on services. DAda The relatively greater importance of services in the CPI, disinflation in that sector could compensate for inflation in goods prices, as the April report shows.
While all the attention has focused on the impact that tariffs on goods prices will have, one of the leading inflation drivers in recent years has been the cost of housing, which represents the most important category within the services sector. Housing prices increased 0.3%, mainly driven by rentals.
Excluding housing and energy, the prices of the services rose 0.2% after having decreased in March. Compared to the previous year, these costs increased 2.7%, The slowest pace in four years. While central banks have emphasized the importance of considering this metric when evaluating the general trajectory of inflation, they calculate it based on a separate index.
This measure, known as the expense price index in personal consumption, PCE, does not give as much importance to housing as the CPI, which explains its tendency to approach the 2% target of the Federal Reserve. A government report on producer prices, which will be published on Thursday, will offer information about additional categories that are incorporated directly to the April PCE, scheduled for the end of this month.
In addition to seeking equity in bilateral trade and reinforcing national industrial safety, the Trump administration argues that tariffs will contribute to promoting national long -term manufacturing and investment. Critics argue that the tariffs themselves, in reality, aggravate a series of challenges that already inhibit relocation.
Central bankers also pay close attention to salary growth, since it can help determine consumer spending expectationsthe main engine of the economy. An independent report published on Tuesday, which combines inflation figures with recent salary data, showed that The average real salary per hour increased 1.4 % compared to the previous year, matching its highest level since October.
