The annual inflation rate dropped to 2.3 percent in April, marking the lowest level in more than four years and falling below economists’ expectations. The figure comes despite uncertainty regarding trade as the US recently implemented sweeping global tariffs.
According to the Labor Department, consumer prices rose just 2.3 percent compared to April 2024, the smallest year-over-year increase since February 2021. The Consumer Price Index (CPI) rose a seasonally adjusted 0.2 percent in April, CNBC reported.
While the 0.2 percent monthly increase was slightly higher than the 0.1 percent drop recorded in March, the year-over-year rate still came in just below the forecasted 2.4 percent. The data offers a boost to President Donald Trump’s economic narrative as his administration’s “Liberation Day” tariffs recently went into effect.
“Inflation has fallen to the lowest level in more than four years as April’s Consumer Price Index smashes expectations for the third straight month in President Donald J. Trump’s Golden Age,” the White House said in a statement. The administration also promoted the data on X, labeling it the “Trump effect.”
Labor Secretary Lori Chavez-DeRemer echoed that sentiment in a post on X, writing, “For the last several years, hardworking families have faced an affordability crisis. Finally, with @POTUS at the helm, Americans are breathing a sigh of relief — every dollar is going further and workers are able to keep more of their hard-earned paychecks!”
Key categories saw price declines. From March to April, food prices dipped slightly by 0.1 percent, with the cost of eggs falling 12.7 percent. The energy index dropped 3.7 percent year-over-year, and gasoline prices fell a notable 11.8 percent over the same period.
Despite concerns that tariffs might drive up consumer prices, some effects may have been mitigated by ongoing international negotiations. On Monday, the Trump administration announced that it had reached an agreement with China to reduce reciprocal tariffs to 10 percent for the next 90 days. In return, China agreed to suspend its retaliatory tariffs on US goods as talks between the two nations continue.
