Key Takeaways

Inflation accelerated in April, rebounding from an unexpected drop in March, but was slightly milder than forecasters had expected.

The cost of living as measured by the Consumer Price Index rose 0.2% seasonally adjusted in April from March, the Bureau of Labor Statistics said Tuesday, bouncing back after a 0.1% decrease in March. The uptick brought the year-over-year inflation rate to 2.3%, down from 2.4% in March, and reaching the lowest since February 2021. Forecasters expected year-over-year inflation to stay flat, according to a survey of economists by Dow Jones Newswires and The Wall Street Journal .

The uptick, driven mainly by housing prices, showed inflation remained relatively tame before consumers absorbed the full brunt of President Donald Trump's import taxes, which he imposed in April. Economists expect inflation pressures to build over the course of the year as merchants pass the cost of tariffs on to customers.

Shoppers got a break at the grocery store in April, as food-at-home prices fell 0.4%, though restaurant meals rose by an equal amount. Prices for natural gas and electricity rose, canceling out a drop in gasoline prices and pushing the cost of energy up 0.7% over the month.

"Core" prices, which exclude volatile prices for food and gas, rose 0.2% over the month, up from 0.1% in March. This leaves 12-month inflation at 2.8%, the same as in March. The median forecast had called for a 0.3% monthly increase in core inflation.

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