The inflation surge that dogged consumers over the last three years has abated. But new consumer-price data from the Bureau of Labor Statistics (BLS) is likely to negate President Donald Trump's ongoing assertion that there is "no inflation" in the U.S. economy. For the period covering the past 12 months, analysts forecast an increase of 2.3% — hardly evidence for the absence of inflation, though it would represent a slight decline from the 2.4% pace seen in March. It is true that, on a monthly basis, average price growth was negative in March. For April, analysts have forecast a monthly increase of 0.2%. Those rates are on par with pre-pandemic paces. Yet even if the pace of price growth has slowed from the Biden era, consumers now report unprecedented levels of uncertainty amid often-changing headlines about how Trump's tariffs plan may be affecting businesses' bottom lines. "Tariffs are now on top of consumers' minds, with mentions of tariffs reaching an all-time high," the Conference Board, which releases a closely watched monthly consumer-sentiment survey, reported late last month. "Consumers explicitly mentioned concerns about tariffs increasing prices and having negative impacts on the economy." Trump is correct to say that gasoline prices declined from a year ago: Today, regular unleaded fuel costs about $3.14 per gallon, compared with about $3.62 a year ago this month, according to AAA. Overall energy costs are also slightly lower, government data show. But grocery price growth rates remain elevated. While the cost of eggs declined in recent weeks, they likely kept the pace of the "food at home" price category higher. But eggs have not been the sole contributor: Ground beef priceshave been surging, while declines in the price of milkhave stalled. Even beyond those essential categories, it would be false to say that inflation has been fully tamed. The "core" inflation measure, which strips out food and energy, was up 2.8% in March, and analysts expected that rate to have persisted in April. On a monthly basis, the core reading was expected to have increased from 0.1% to 0.3%. One major culprit is housing: One-third of the Consumer Price Index is composed of shelter costs, and those have continued to rise, although not as quickly as during the Biden administration. While the pace of 12-month rent growth has slowed, at 4% it isabout equal to the highs seen before the onset of the pandemic.The BLS' official measure of overall housing costs is also at 4%, higher than pre-pandemic levels. There was likely some impact from tariffs last month. Analysts with Bank of America said in a note to clients last week that they expected auto prices to be higher "due in part to front-loaded demand in anticipation of higher prices from tariffs." In general, uncertainty continues to reign supreme.In remarks Monday, Federal Reserve Governor Adriana Kugler admitted, "it is currently hard to judge the underlying pace of growth of the U.S. economy," mostly because Trump's tariffs continue to distort economic data, she said. Kugler's remarks were prepared before Monday's announcement of a stand-down with China on reciprocal tariffs. Still, the headline 30% level, down from 145%, that the U.S. is expected to keep on Chinese imports stands to pull prices upward. The latest report from the Yale Budget Labestimatesthat even with that lower tariff rate, consumers will continue to face an overall average effective tariff of 17.8%, the highest since 1934. "Given these expected price increases, real incomes will fall, and operating costs will rise, which will lead consumers to demand fewer final goods and services and firms to demand fewer inputs," Kugler said. "Ultimately, I see the U.S. as likely to experience lower growth and higher inflation."
