#CPI&JoblessClaimsWatch

For the week ending April 5, 2025, U.S. economic data showed mixed signals regarding inflation and the labor market, reflecting a delicate balance between slowing inflation and a stable labor market.

Inflation (CPI): Notable Slowdown

Consumer Price Index (CPI): Decreased by 0.1% month-over-month in March, leading to a decline in the annual rate to 2.4%, which is below the expectations of 2.5% and lower than the February reading of 2.8%.

Core CPI: Increased by 0.1% month-over-month, with the annual rate dropping to 2.8%, indicating a slowdown in core inflation.

Unemployment Claims: Relative Stability

Initial Claims: Rose by 4,000 to reach 223,000, in line with expectations. This figure remains historically low, indicating a strong labor market.

Continuing Claims: Decreased by 43,000 to reach 1.85 million, reflecting stability in the labor market.

Market Impacts and Federal Reserve Outlook

Financial Markets: S&P 500 futures fell by 1.8% ahead of the data release, reflecting investor caution.

Federal Reserve Policy: The slowdown in inflation may prompt the Fed to delay or reduce the pace of interest rate hikes, with the likelihood of a rate cut in May decreasing to 17%, while expectations still indicate a 74% chance of a rate cut by June.