#CPI&JoblessClaimsWatch

It is still likely too early to see significant increases in final U.S. consumer prices from tariffs. We anticipate a slower 0.2% month-over-month rise in both headline and core consumer price index measures in March. This will nudge both annual core and headline inflation down to 3% and 2.7%, respectively. Core goods inflation is likely to hold steady, still underperforming services sector inflation—at least for another month.

But there are already signs that tariffs have begun to push up costs earlier in the production cycle. The latest ISM manufacturing survey suggested the share of U.S. firms facing higher prices rose drastically in March. “Dramatic increases” were noted especially for steel and aluminum products thanks to related tariffs. We expect goods inflation in the U.S. may heat up in the months ahead.