US inflation somewhat below expectations, again
US consumer prices rose somewhat more slowly than expected again in April.
Commerzbank Economic Research
05/13/2025
The data
US consumer prices rose by 0.2% in April from the previous month. The year-on-year rate fell from 2.4% to 2.3%. The more important core rate, which excludes the volatile prices for energy and food, was also 0.2% on the previous month. In year-on-year terms, it remained at 2.8%. Most economists had expected the month-on-month rates to be 0.3% each.
Background
Before the tariff shock, inflation in the US had apparently calmed down. In April, inflation data was lower than expected for the third month in a row. The core rate, which is important for the trend, has only increased by an annualized 2% in the last three months. This may reflect the fact that wage growth has slowed considerably which helped companies to reduce the increase in costs.
In the coming months, however, tariff-related price increases should have a bigger impact, especially for goods. There was still little sign of this in April, even though some products that are typically imported from China became more expensive. This applies, for example, to furniture (+1.5%), household appliances (+0.8%) and toys (+0.3%).
The fact that the underlying inflation eased significantly before the tariff shock reduces the risk of price increases getting out of hand.
For full text see attached PDF-Version.
