US monthly inflation rate slows amid Trump tariffs

TruthLens AI Suggested Headline:

"US Inflation Rate Declines Amid Ongoing Tariff Impacts"

US monthly inflation rate slows amid Trump tariffs analysis cover image The Guardian 7.1
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Original Article Source: https://www.theguardian.com/business/2025/may/13/us-inflation-trump-tariffs
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TruthLens AI Summary

In April, the annual inflation rate in the United States decreased to 2.3%, down from 2.4% in March, as reported by the Bureau of Labor Statistics (BLS). This report coincided with the month in which former President Donald Trump announced significant tariffs on the country's largest trading partners, referred to as his "liberation day" tariffs. Core inflation, which excludes the often volatile prices of food and energy, also showed a similar trend, registering an annual increase of 2.3% compared to 2.4% in March. While the report captures the inflation landscape following Trump's tariff announcements, businesses are still assessing the longer-term impacts of these tariffs on their operations and pricing strategies. Although Trump has since rolled back many of the tariffs and introduced trade deals with the UK and China, a significant 35% tariff remains on imports from China, with most other imports facing a 10% levy. Consequently, consumers are preparing for potential price hikes, reflecting a growing economic anxiety among the population.

Consumer sentiment took a noticeable hit in April, as indicated by the University of Michigan’s Survey of Consumers, with inflation expectations rising to 6.5%, the highest level since 1981. A recent Harris/Guardian poll revealed that 60% of Americans have postponed major financial goals due to the current economic conditions, signaling widespread concern. Although Wall Street reacted positively to a temporary pause in the tariff dispute with China, economists predict that price increases may worsen throughout the year. Many companies have yet to raise prices significantly because the goods currently on sale were imported prior to the implementation of the new tariffs. Federal Reserve officials have indicated that tariffs are likely to affect prices, potentially delaying the inflation rate from reaching the Fed’s target of 2% by a year or more. Fed Chair Jerome Powell noted that the risks of higher inflation and unemployment have increased due to these tariffs, contradicting Trump’s claims that inflation is merely a remnant of the previous administration's policies.

TruthLens AI Analysis

The article presents a nuanced view of the current inflation situation in the United States, particularly in the context of recent tariff announcements made by former President Donald Trump. By focusing on the slowing pace of inflation, the report highlights the complexities surrounding economic indicators and consumer sentiment.

Economic Indicators and Consumer Sentiment

April's inflation rate decreased to 2.3% from 2.4% in March, which may suggest a positive trend. However, the drop in consumer sentiment indicates a disconnect between economic data and public perception. The rise in inflation expectations to 6.5%, the highest since 1981, reflects growing anxiety among consumers regarding future economic conditions.

Impact of Tariffs

The article emphasizes the ongoing effects of Trump's tariffs on businesses and consumers. While some tariffs have been rolled back, significant levies remain, particularly on imports from China. The uncertainty surrounding these tariffs contributes to consumer apprehension about price increases, suggesting that businesses have not yet fully passed on costs to consumers.

Market Reactions and Economic Predictions

The stock market's positive response to a temporary pause in the tariff dispute contrasts sharply with consumer anxiety. This reflects a trend where financial markets react more to policy changes than to the broader economic sentiment of the populace. Economists predict that inflation may worsen as companies begin to adjust prices in response to the tariffs, indicating a potential future rise in the inflation rate.

Public Perception and Broader Implications

The findings from the Harris/Guardian poll reveal widespread economic anxiety, with many Americans delaying major financial decisions. This sentiment could influence political dynamics and consumer behavior moving forward. The article raises questions about how long this pessimism will persist and its implications for future economic policies.

Potential Manipulation and Trustworthiness

The framing of the article could be seen as manipulative, particularly in how it juxtaposes economic data with public sentiment to create a narrative of uncertainty. While the facts presented are grounded in reported statistics, the emphasis on consumer anxiety and the potential for worsening inflation may serve to amplify fears rather than provide a balanced perspective.

The reliability of the article is relatively high, as it cites credible sources such as the Bureau of Labor Statistics and academic surveys. However, the selection of information and the narrative focus can influence public perception and reactions to the economic situation.

In summary, the article reflects a complex interplay between economic data and consumer sentiment, with significant implications for public perception and market dynamics. The portrayal of inflation and tariffs may contribute to a narrative of uncertainty that could shape future economic and political landscapes.

Unanalyzed Article Content

Source URL: https://www.theguardian.com/business/2025/may/13/us-inflation-trump-tariffs

The pace of inflation slowed in April, the month thatDonald Trumpannounced his sweeping “liberation day”tariffson the US’s largest trading partners.

The annual inflation rate was 2.3% in April, down from an annual rate of 2.4% March, according to a new inflation report from the Bureau of Labor Statistics (BLS).

Core inflation, which excludes volatile energy and food prices, hit an annual rate of 2.3% in April, compared to an annual 2.4% increase in March.

While the inflation report covers April, after Trump’s announcement, it comes as businesses are still trying to figure out the impact of the tariffs.

Trump has rolled back most of the tariffs he announced in early April, unveiling trade deals with the UK and China in the last week. But imports from China face a 35% levy and most other US imports still face a 10% levy. Consumers appear to be bracing themselves for higher prices.

Consumersentimentdropped sharply in April, measured by the University of Michigan’s Survey of Consumers, and expectations of inflation rose to 6.5%, the highest it has been since 1981.

A new Harris/Guardianpollpublished on Monday found six out of 10 Americans have had to hold off on a major financial goal because of the current economy, an indicator of widespread economic anxiety.

It is unclear how long this pessimism will last. Wall Street rose sharply on Monday after the announcement of a 90-day pause in Trump’s tariff dispute with China. But stock markets have been more reactive to changes to Trump’s tariff policies than consumers.

Economists also expect price increases to get worse this year. Many companies have not had to increase prices yet, as many of the goods being sold now were imported before the new tariffs were implemented.

Though the pace of inflation has slowed, officials at theFederal Reservesaid they expect tariffs to have an impact on prices, even if only temporary.

“Certainly the risk to higher inflation [and] higher unemployment have increased,” the Fed chair, Jerome Powell, said at a press conference last week, adding that tariffs could delay inflation from reaching the Fed’s target rate of 2% by at least a year. “We would, at least for the next, say, year, not be making progress toward those goals if that’s the way tariffs shake out.”

This is contrary to what Trump has been saying about tariffs and the impact they have had on prices. Trump insists that any inflation is a holdover from the Biden administration, though Trump has been in the White House for over three months.

“DRUG PRICES TO BE CUT BY 59%, PLUS!,” Trump wrote on social media Monday. “Gasoline, Energy, Groceries, and all other costs, DOWN. NO INFLATION!!!”

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Source: The Guardian