April Consumer Price Index Slowed to Smallest Pace Since 2021

April inflation slowed to its lowest point in four years, but that progress may be short-lived as the Trump administration’s tariffs begin to push up the cost of consumer goods.

Economists widely expect the administration’s tariffs to boost prices and erode consumers’ spending power.

For now, the trend was below expectations, as prices for groceries, gasoline, and apparel fell, Megan Leonhardt and Janet H. Cho reported for Barron’s Daily.

The Consumer Price Index (CPI) rose 2.3% in April from a year ago, the lowest reading since February 2021. Headline inflation inched up 0.2% from March, while the core number, excluding food and energy costs, also rose 0.2%.

The shelter index increased 0.3% from March, accounting for more than half of the monthly gain. Meanwhile, the food index declined 0.1%, driven largely by a 0.4% drop in grocery prices—including a 12.7% plunge in egg prices.

Prices in categories such as household furnishings, which rose 1% in April after remaining flat in March, are closely watched for signs that the effects of higher tariffs are beginning to creep into inflation data.

Medical-care goods increased 0.4%, while apparel costs fell 0.2%. Although the data is not expected to pressure Federal Reserve officials to cut interest rates immediately, economists widely expect the administration’s tariffs to boost prices and erode consumers’ spending power.

That could slow the economy and potentially lead to one or two rate cuts in the second half of the year.