#CPI&JoblessClaimsWatch
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#CPI&JoblessClaimsWatch: Inflation Slows, Labor Market Shows Resilience
This week's economic data brought a mixed bag for U.S. markets, highlighting both cooling inflation and subtle shifts in the labor market. The Consumer Price Index (CPI) for March 2025 showed a slight decline, with headline inflation falling by 0.1% month-over-month. Annual inflation now stands at 2.4%, down from 2.8% in February — a welcome sign for consumers and policymakers. Core CPI, which excludes food and energy, also showed a modest 0.1% rise, bringing the yearly rate to 2.8%, its lowest since early 2021.
Lower energy prices, particularly a 6.3% drop in gasoline, helped ease inflationary pressures. Meanwhile, food prices edged up by 0.4%, driven by increases in meat, dairy, and egg costs. Shelter costs, which have remained sticky in recent months, saw a smaller increase of just 0.2%.
On the employment front, initial jobless claims ticked up slightly to 223,000, signaling some softness in hiring, though the labor market remains relatively tight. Continuing claims dropped to 1.88 million, suggesting that while layoffs may be rising slowly, rehiring is still strong.
However, consumer sentiment took a hit. The University of Michigan’s index plummeted to 50.8 in April — its lowest level since June 2022. One-year inflation expectations surged to 6.7%, the highest since 1981, raising concerns about long-term consumer confidence.
As markets digest this data, the Federal Reserve’s next moves remain in focus, especially with growing concerns over tariffs and economic slowdown. Investors are watching closely — and so should we.
