(Headline USA) U.S. inflation declined last month as the cost of gas, airline fares, and hotel rooms fell, a sign that price growth was cooling even as President Donald Trump ramped up his tariff threats.
Consumer prices rose just 2.4% in March from a year earlier, the Labor Department said Thursday, down from 2.8% in February. That is the lowest inflation figure since September.
Excluding the volatile food and energy categories, core prices rose 2.8% compared with a year ago, down from 3.1% in February. That is the smallest increase in core prices in nearly four years. Economists closely watch core prices because they are considered a better guide to where inflation is headed.
The report shows that inflation is mostly cooling. Yet Trump’s huge tariffs on China and 10% universal duty are likely to push up prices in the coming months, economists say. The higher import taxes will likely weigh on the economy’s growth as well.
On a monthly basis, prices actually fell 0.1% in March, the first monthly drop in nearly five years. Core prices rose just 0.1% in March from February.
Used car prices dropped 0.7% from February to March, the government said. The cost of auto insurance fell 0.8%, welcome relief for car owners, though insurance costs are still up 7.5% compared with a year ago.
One reason prices fell was sharp drops in travel-related costs, including air fares, which slipped 5.3% just from February to March. Hotel room prices dropped 3.5%. Visits to the United States from overseas fell nearly 12% last month, according to government data.
The cost of groceries, however, jumped 0.5% last month, the report showed, as egg prices leapt 5.9% to a new record average price of $6.23 a dozen. Clothing prices rose 0.4%, though they have increased little in the past year.
Trump had imposed sweeping tariffs on nearly 60 nations last week, which sent financial markets into a tailspin and caused sharp drops in business and consumer sentiment. Yet on Wednesday he paused those duties for 90 days. He kept a steep 125% tariff on all imports from China and 25% duties on steel, aluminum, imported cars, and many goods from China and Mexico.
Adapted from reporting by the Associated Press
