Inflation was steady in April, meaning no sign of tariff shock yet

Consumer prices rose in April but not as badly as expected, according to a federal inflation report Tuesday that shows President Trump’s tariffs have not taken a major toll on prices so far.

The Bureau of Labor Statistics said the consumer price index rose 0.2% in April for an annual rate of 2.3%, putting it slightly below Wall Street predictions.

Shelter costs rose 0.3%, accounting for more than half of the all-items increase. Energy costs also increased, with upticks in the natural gas index and the electricity index offsetting a decline in the gasoline index.

Food costs, however, declined 0.1% in April.

The overall increase was a reversal from March, when prices fell 0.1%.

The path forward is uncertain, because Mr. Trump imposed blanket tariffs on imports at the start of April.

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Economists say the added cost of tariffs will eventually be passed along to consumers. However, retailers got ahead of the tariffs by increasing imports, and the U.S. and China struck a weekend truce that brought them back from the brink of a debilitating trade war.

U.S.-China talks slashed sky-high tariffs that exceeded 100% from both countries, with China now imposing a 10% levy on American goods while Chinese products face a 30% tariff when they enter the U.S.

The White House also slashed the tariff on low-value “de minimis” shipments from China to U.S. buyers from 120% to 54%.

Mr. Trump has imposed a 10% tariff on all imports and 25% tariffs on such as steel, aluminum and automobile imports.

For now, the lower-than-expected inflation report is likely to fuel Mr. Trump’s calls on the Federal Reserve to slash interest rates. 

The president says the central bank, which has stood pat on rates, must act to ease the nation’s transition under his economic plan.

The Trump War Room, an arm of Mr. Trump’s political operation, boasted that Tuesday’s reading was the lowest annual rate of inflation since 2021. Rampant inflation dogged the Biden administration for four years.

“President Trump’s plan to unleash American energy, cut regulations, and slash government waste is working,” the Trump operation said on X.