Sorry if the roller coaster analogy for the economy is getting a bit tired, but...well, that’s how it feels! In April, the ride – in particular, inflation – slowed down a bit, giving everyone a chance to catch their breath. But economists warn that the next big climb is just around the corner, thanks to new tariffs that could make everything from toys to tacos more expensive. So, enjoy the brief pause before the next loop-de-loop!
Here are Five Fast Facts on inflation going down:
- 📉 Consumer Price Index - In April, the CPI rose by 0.2%, bringing the annual inflation rate down to 2.3%—the lowest since early 2021. It's like the economy hit the snooze button on rising prices, and we’re here for it!
- 💪 Core Inflation Holds Steady - Excluding food and energy, which are both very volatile, core inflation remained at 2.8% year-over-year. So, while your grocery bill might have eased, rent and other essentials are still flexing their muscles.
- 👀 Tariffs Loom on the Horizon - Economists think that recent tariffs, especially those targeting Chinese imports, haven't fully impacted prices yet. As businesses use up their pre-tariff inventories, consumers might see costs rise in the coming months.
- 🥚 Egg Prices Crack Down - In a surprising twist, egg prices dropped by 12.7% in April, offering some relief to breakfast lovers. However, this sunny-side news might be short-lived if tariffs start affecting food imports.
- ⚠️ Federal Reserve Stays the Course - Despite the slowdown in inflation, the Federal Reserve is keeping interest rates steady, cautious about potential inflationary pressures from tariffs and other economic uncertainties. Also, because their spreadsheet told them so.
🔥Bottom line: April's inflation report offers a welcome sigh of relief, but the economic forecast is still hard to predict. As tariffs begin to take effect, it’s possible there will be more price hikes...or there may not. It’s kind of like predicting the weather! Anyway, enjoy the current calm—before the economic roller coaster potentially picks up speed again!
Are your dollars stretching any further right now?
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