By Christopher Lugerber, Economics writer for the Associated Press
WASHINGTON (AP) — President Donald Trump’s tariffs have yet to push prices up, but US revenues have been surged, leading US major inflation calculations slowed last month.
A report from the Commerce Department on Friday showed that consumer prices rose just 2.1% in April, down from 2.3% in March from the lowest since September, compared to the previous year. Excluding the volatile food and energy categories, core prices rose 2.5% from the previous year, below 2.7% in March. Economists usually track core prices to provide a better reading of where inflation is heading.
The numbers show that inflation is still falling from post-pandemic spikes, which reached its highest level in 40 years in July 2022. Economists and some executives have warned that prices are likely to be higher as Trump’s broad tariffs will take effect.
Each month, both the overall price and core price are just 0.1% from March to April.
At the same time, revenue rose 0.8% before adjusting for inflation. Much of that benefit reflects an increase in Social Security benefits for some retired teachers, firefighters, and federal workers whose incomes were previously not fully counted in Social Security benefits.
The Federal Reserve inflation fighter said in its latest meeting on May 6-7 that inflation rates are still rising compared to the 2% target. Focusing on core prices, Fed officials are widely supportive of stabilizing key interest rates while assessing the impact of tariffs on inflation and employment.
According to the report, consumer spending rose 0.2% from March to April, down from a large 0.7% increase in March.
Last Wednesday’s court decision said most of Trump’s tariffs were illegal, including obligations relating to imports from Canada, Mexico and China, as well as obligations relating to imports from more than 50 other countries. Customs duties on steel, aluminum and cars have been implemented under various laws and remain intact.
However, the obligation was permitted to remain in effect while the Trump administration appealed ruling against them. And the administrative authorities say they will find other legal authorities if necessary to implement the tariffs. As a result, what kind of tariffs are in place and how long will the period remain extremely uncertain.
Original issue: May 30, 2025 9:08am EDT
