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United States Inflation April 2025

United States: Inflation drops to lowest level since February 2021 in April

Latest reading: Inflation came in at 2.3% in April, which was down from March’s 2.4%. April’s reading marked the lowest inflation rate since February 2021 and was below market expectations, but was still slightly above the Fed’s 2.0% target. Looking at the details of the release, price pressures for food, housing and transport weakened in April relative to the month prior.

In addition, the trend pointed down mildly, with annual average inflation coming in at 2.7% in April (March: 2.8%). Meanwhile, core inflation was unchanged, coming in at March’s 2.8% in April.

Lastly, consumer prices increased 0.22% from the previous month in April, contrasting the 0.05% fall logged in March.

Panelist insight: On the reading, TD Economics’ Thomas Feltmate said:

“While goods prices […] turned higher last month, there was little evidence to suggest that the uptick was driven by President Trump’s sweeping tariffs announced at the beginning of April. Efforts by companies to stockpile inventories and a willingness to absorb some of the tariff costs suggests a more incremental strengthening in goods prices is likely to occur over the coming months.”

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