Inflation ticked slightly higher in April as tariff impact looms

Inflation rose slightly in April and remained above the Federal Reserve’s target rate as the economic impact of higher tariffs is expected to impact consumer prices in the coming months.

The Bureau of Labor Statistics on Tuesday said that the consumer price index (CPI) – a broad measure of how much everyday goods like gasoline, groceries and rent cost – rose 0.2% in April compared with last month, while it was up 2.3% on an annual basis. The annual inflation rate was the lowest since February 2021.

Both of those figures were slightly cooler than the estimates of economists polled by LSEG, who predicted a monthly figure of 0.3% and annual inflation of 2.4%. The rise in monthly inflation comes after an unexpected decline in March, when it fell 0.1%. Headline inflation was unchanged in April.

So-called core prices, which exclude more volatile measurements of gasoline and food to better assess price growth trends, were up 0.2% from the prior month, slightly cooler than expected, and 2.8% on an annual basis, in line with economists’ expectations. The headline figure was unchanged, while the monthly figure was up from a 0.1% increase a month ago.

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