Slightly lower than the expected inflation to USA In April, as President Donald Trump’s duties have just begun to hit the slowing US economy.
The consumer price index, excluding the frequently volatile food and energy categories, increased by 0.2% since March, according to data from the US Statistics Office published Tuesday (13.5.2025). Compared to April last year, the basic CPC increased by 2.8%, unchanged compared to the previous month. Inflation increased by 0.2% and climbed 2.3% annually.
The report on the ICC showed a retreat of air fares and hotels, indicating a weaker demand for discretion services. Used cars, trucks and clothing was also dropped. Food prices have been reduced for the first time for almost a year, including the highest fall since 1984 at egg prices. The prices of new cars remained unchanged, defying expectations for duty rise. However, the prices of furniture and electrical appliances – goods imported to a large extent – have jumped.
While Trump’s duties are widely expected to boost inflation, companies may still work to overcome a huge stock of accumulated stocks before resorting to prices. Many duties have been withdrawn – including those for China after reaching a temporary agreement – but US importers are still fighting at the highest commercial costs and are afraid that they could be launched again when the pause ends.
Suspension of 90 days – a move that reduced combined contributions of 145% of the US to most Chinese imports to 30% – suggests that there could be milder price increases. But if the replenishment period to replenish the supply creates congestion in the ports, this can actually lead to faster price increases in the ICC, according to Bloomberg Economics.
State bonds expanded their rally, the dollar fell and the future S&P contracts reduced previous losses after the data.
Given the extreme uncertainty about how duties will evolve and how they will eventually affect the economy, the US Federal Bank (FED) keeps interest rates on waiting for the visible future. Many economists have acknowledged that pause with China reduces the risk of recession in the US, but duties will continue to maintain inflation well above the target of the central bank.
Companies by Nintendo Co. up to Procter & Gamble Co. They have stated that they will try to pass on the cost of customs duties to consumers. However, the extent of their pricing power is unclear as demand slows down. Consumer spending on retail sales data – which largely recorded the costs of goods – were rather unchanged in April, in view of the report expected on Thursday (15.5.2025). Excluding food and energy, prices of basic goods have increased little, according to data from the CPC.