Annual Inflation Holds Steady as Tariffs Start to Show Impact

President Donald Trump’s tariffs are beginning to affect inflation, although economists say most of the impacts are yet to come.

The consumer price index (CPI) for April increased 0.2% on a monthly basis, after falling 0.1% in March, and rose 2.3% for the 12 months ending in April, the U.S. Bureau of Labor Statistics (BLS) reported May 13. The annual inflation rate was just below March’s 2.4% figure.

The index for shelter rose 0.3% in April, accounting for more than half of the all-items monthly increase, according to the BLS. The energy index also increased over the month, rising 0.7% as increases in the natural gas index and the electricity index more than offset a decline in the gasoline index. Conversely, the index for food fell 0.1% in April as the food at home index declined 0.4% and the food away from home index rose 0.4% over the month.

Core CPI inched up 0.2% for April — following a 0.1% increase in March — and 2.8% annually.

The small monthly uptick reflects the initial impact of how prices have responded in the wake of Trump’s sweeping tariffs on imported goods, explained Sydney Ross, economic researcher at SHRM.

“These announced tariff rates are much higher than what firms experienced a year ago and have likely contributed to higher input costs,” she said. Although year-over-year inflation numbers — both overall and core inflation — remain at relatively low and healthy levels, “intense uncertainty persists regarding future inflation, largely because of trade policies that continue to be in flux.”

Analysts are still waiting for news about which countries have made deals to avoid reciprocal tariffs. “While trade talks are continuing with various partners, we still do not know what goods will be included in future trade deals, whether these deals will be permanent, or what the tariff rate will be,” Ross said. “Since many of these trade policies are in flux, employers, particularly those that operate in productive sectors or rely on inputs sourced from the rest of the world, cannot confidently respond to evolving economic conditions.”

Read: Tariffs, Economic Pressures Causing Unease About Compensation

Real Earnings Unchanged

Meanwhile, real average hourly earnings for all employees were unchanged from March to April, seasonally adjusted, the BLS reported separately. This result stems from an increase of 0.2% in average hourly earnings combined with an increase of 0.2% in the CPI.

Real average weekly earnings decreased 0.1% over the month due to no change in real average hourly earnings combined with no change in the average workweek. 

That data comes on the heels of the BLS’ March 2025 employment cost index (ECI), which found that wage growth held steady in the first quarter. Wages and salaries increased 0.8% and benefit costs increased 1.2% from December 2024, according to the ECI.