The good news: Inflation was slightly lower than expected in April, per the US Labor Department.

• The Consumer Price Index (CPI) rose 2.3% YoY—its lowest annual increase since February 2021 and just below analysts’ expectations of 2.4%. CPI increased 0.2% MoM, in line with forecasts.
• Core CPI, which excludes volatile food and energy prices, rose 2.8% YoY and 0.3% MoM, both matching expectations.
• Notably, egg prices fell 12.7% MoM after spiking due to avian flu-related disruptions—though they remain 49.3% higher YoY.

The big “but”: The report does not reflect the inflationary impact from the recent “Liberation Day” tariffs. That’s to be expected since the tariffs were announced on April 2 but paused for 90 days on April 9, delaying their effect.

• While a 10% universal tariff remains in place, retailers are still drawing from pre-tariff inventory. That means the full pricing impact—especially in categories reliant on imports—has yet to show up in inflation data.
• But early signs of cost increases are emerging. For example, auto insurance premiums rose 6.4% YoY and 0.6% MoM, likely reflecting insurers baking in the new 25% tariff on foreign-made auto parts, which took effect May 3.