The inflation in the United States (U.S.) slowed sharply in March, according to new data released on Thursday. This trend underscores the continued strength and resilience of the economy, particularly in light of President Trump’s aggressive trade policies.
The latest reading of the Consumer Price Index (CPI) revealed that inflation cooled to an annual rate of 2.4 percent in March. This development comes as countries, businesses, markets, and consumers face America’s most significant escalation of tariff rates in over a century.
First monthly price decline since May 2020
Economists have warned that Thursday’s CPI report could represent the low point for inflation this year, as Trump’s sweeping tariffs disrupt the global economic order, likely making imports—and consequently, consumer goods—markedly more expensive.
In March, prices fell by 0.1 percent compared to the previous month, reflecting a slower growth pace than the 0.2 percent increase recorded in February, according to data from the Bureau of Labor Statistics. This marks the first time prices have declined on a monthly basis since May 2020.
Energy prices drive overall CPI lower
The overall CPI index decreased mainly due to lower energy prices, which fell partly because of seasonal adjustments—prices typically rise in March but were subdued this time due to growth and recession concerns.
At the grocery store, food prices surged, increasing by 0.5 percent from February, when prices remained flat. Egg prices continued to rise as the industry grapples with the aftermath of a severe avian flu outbreak. The CPI egg index rose 5.9 percent from February and was up 60.4 percent annually.
While the U.S. Department of Agriculture has indicated that wholesale prices are beginning to decrease as the avian flu situation improves, these reductions were not evident at the retail level last month.
Underlying inflation cools more than expected
Energy and food prices can be quite volatile, but Thursday’s report indicated that underlying inflation cooled significantly more than economists had anticipated. Core CPI, which excludes food and energy, increased by just 0.1 percent for the month, resulting in a rate of 2.8 percent for the 12 months ending in March. This marks a sharp slowdown from the 3.1 percent rate in February, making it the lowest core CPI rate in nearly four years.
