One of the closely monitored inflation indicators experienced a slowdown last month, indicating that prices were gradually decreasing before the implementation of most tariffs imposed by President Donald Trump.
At the same time, consumer spending accelerated, perhaps in an effort to preempt the imposition of tariffs.
A report from the U.S. Department of Commerce released on Wednesday showed that consumer prices rose by only 2.3% in March compared to the previous year, down from the 2.5% recorded in February. When excluding volatile categories like food and energy, core prices increased by 2.6% compared to the previous year, which is lower than the 2.8% recorded in February. Economists pay particular attention to core prices as they typically provide a more accurate reading of future inflation trends.
The slowdown in inflation may represent a temporary reprieve before the broad tariffs imposed by Trump begin to push prices higher in many sectors. Economists expect the recent trajectory of inflation to change, reaching 3% or more by the end of this year.
