Inflation fell last month as gas prices dropped sharply, a sign prices cooling before tariffs
By CHRISTOPHER RUGABER Associated Press Economics Writer WASHINGTON AP U S inflation declined last month as the cost of gas fell a sign that price advance was cooling even as President Donald Trump ramped up his tariff threats Consumer prices rose just in March from a year earlier the Labor Department stated Thursday down from in February That is the lowest inflation figure since September Excluding the volatile food and strength categories core prices rose compared with a year ago down from 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 The document shows that inflation is mostly cooling for now Yet President Donald Trump s huge tariffs on China and universal duty are likely to push up prices in the coming months economists say The higher import taxes will likely weigh on advance as well On a monthly basis prices genuinely fell 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 in March from February The cost of groceries however jumped last month the review evidenced as egg prices leapt to a new record average price of a dozen Trump had imposed sweeping tariffs on nearly 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 days He kept a steep tariff on all imports from China and duties on steel aluminum imported cars and several goods from China and Mexico The remaining tariffs are still likely to lift inflation this year economists say even with the -day pause Even with the pause a great number of companies are still uncertain where agreement protocol will go next Trump has also noted that duties on pharmaceutical imports will be imposed Consumers will likely see specific prices rise because of the existing duties including the massive tariffs on China The United States imports more than billion of iPhones and other mobile phones every year from China as well as massive amounts of clothes shoes and toys Plenty of U S companies will likely shift production out of China a process that had already started during Trump s first term when he slapped duties on several of its exports Still China remains the Unite States third-largest trading partner Shifting supply chains out of China will also likely take time and come with its own costs which could raise prices for U S consumers in the coming months Last week Federal Reserve Chair Jerome Powell commented that the central bank was likely to keep its key interest rate unchanged at about as it waited to see how Trump s policies impacted the financial system Trump called for the Fed to cut rates on Friday There s a lot of waiting and seeing going on including by us Powell reported And that just seems like the right thing to do in this period of uncertainty
