US inflation cools and Americans step up spending as they brace for tariff impact
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Shoppers move through a market in the Chinatown neighborhood of Los Angeles, Monday, April 21, 2025. (AP Photo/Andy Bao) A shopper looks at a clothing display at a Gap store, Friday, April 18, 2025, in Miami Beach, Fla. (AP Photo/Marta Lavandier) WASHINGTON (AP) — A closely watched inflation gauge cooled last month in a sign that prices were steadily easing before most of President Donald Trump’s tariffs were implemented.
AI Summary
Main Idea: US inflation eased in March while consumers increased spending, but President Donald Trump’s new tariffs are expected to push prices higher soon.
Key Points:
- The Commerce Department said prices rose 2.3% in March from a year earlier, down from 2.7% in February.
- Core inflation, which excludes food and energy, also cooled to 2.6%, a sign of easing price pressure before most tariffs took effect.
- Consumer spending jumped 0.7% in March, led by auto purchases as shoppers tried to buy before Trump’s car tariff kicked in.
- The Federal Reserve is likely to keep interest rates unchanged for now as it waits to see how tariffs affect inflation and the economy.
Impact on the People
Negative Impact
Trump’s tariffs may push up prices on cars and many imports, squeezing household budgets and small businesses that buy overseas supplies.
Positive Impact
Cooling inflation could give families a short break on prices and keep the Federal Reserve from raising borrowing costs soon.
How did each entity affect people?
Rate how each entity in this article affected the American people.
- Primary:Federal Reservegovernment agency or body
- Primary:President Donald Trumpperson
Candidate Entities5 candidates · 5 weighted vote min · 70% decision
- Federal Reservegovernment agency or bodyPrimaryEvaluated
Central institution in the story because its inflation target and rate stance are a major focus.
Include 0 (0%)Ignore 0 (0%)5 to threshold - President Donald TrumppersonPrimaryEvaluated
Central political actor driving the tariffs and comments about prices and interest rates.
Include 0 (0%)Ignore 0 (0%)5 to threshold - Chair Jerome PowellpersonMajorAI selected
Named Federal Reserve chair whose stance on rates and tariffs is directly discussed.
Include 0 (0%)Ignore 0 (0%)5 to threshold - Capital Economicseducational / research institutionContextCandidate
Economic research firm quoted for inflation expectations, but not a central actor.
Include 0 (0%)Ignore 0 (0%)5 to threshold - Denise DInnocenziopersonContextCandidate
Not included because the named contributor is a reporter, but this was not central to the story.
Include 0 (0%)Ignore 0 (0%)5 to threshold
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