The year-over-year consumer inflation rate in the U.S. dropped to 2.3% in April 2025, marking the lowest rate in over four years, the Bureau of Labor Statistics said in a report on Tuesday.
Tuesday's release of the consumer price index indicates that President Donald Trump's newly imposed tariffs have yet to impact the broader economy, as many economists predict that prices on consumer goods could rise in the coming months.
On Monday, the Budget Lab at Yale University said President Trump's tariffs would raise prices by almost 2% in the short run, costing the typical middle-class household more than $2,200 per year.
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The report indicates that Trump's tariffs disproportionately affect textile imports. In the near term, consumers are facing 15% higher prices for shoes and 14% higher prices for apparel, the Yale report says. However, the updated consumer price index noted that apparel prices in April 2025 were actually lower than those in April 2024.
It is unclear what long-term impact the tariffs will have on the consumer price index, as tariffed goods are just starting to enter the supply chain.
Currently, Trump has implemented a 10% duty on most imports, along with a 25% tax on steel and aluminum products. He also reduced the 145% tariff imposed on China to 30% for 90 days, beginning yesterday.
The consumer price index weighs the costs of goods based on their importance. Items like food, shelter and energy tend to be weighted more heavily.
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Over the last decade, prices have generally increased at a rate of 3.2% per year. Over the last 20 years, consumer inflation has typically risen by 3% annually. The Federal Reserve, however, has aimed to keep annual inflation at approximately 2%.
At its meeting last week, the Federal Reserve opted to keep federal interest rates unchanged after last lowering them in December 2024.
