The year-over-year inflation in the United States dropped to 2.4% in March, according to data released this Thursday by the Bureau of Labor Statistics (BLS), marking a decrease of four-tenths from the 2.8% recorded in February.
This is the lowest figure since September of last year and a sign that price growth is beginning to moderate, although analysts warn that President Donald Trump's trade policy could reverse this trend in the coming months.
Gasoline prices are down, but food prices are up
The decline in inflation is primarily attributed to the drop in gasoline prices, which fell by 6.3% in March.
In fact, the Consumer Price Index (CPI) decreased by 0.1% on a monthly basis, marking its first monthly decline in almost five years.
The prices of plane tickets (-5.3%), used cars, car insurance, and hotel rooms also decreased.
In contrast, the cost of food rose by 0.4%, with a notable increase of 5.9% in the price of eggs, which reached a new record average price of 6.23 dollars per dozen.
Year-on-year, eggs have seen an increase of 60.4%, making them one of the products most affected by inflation over the past year.
Housing, one of the most sensitive areas for American families, recorded a monthly increase of 0.2%, bringing the annual rise to 4%, the lowest level since November 2021.
Car prices barely rose by 0.1%, partly due to the expectation of the impact from the new 25% tariffs that came into effect this month on vehicles not manufactured in the U.S.
Core inflation is also slowing down
When excluding the more volatile categories such as food and energy, the so-called core inflation also showed signs of moderation.
In March, core prices increased by 0.1% compared to February, and stood at 2.8% year-on-year, down from the 3.1% recorded the previous month.
This is the second consecutive drop in this index, which had remained stagnant at 3.3% for five months. Furthermore, it is the lowest increase since March 2021.
Economists believe that core inflation is a better indicator of the general trend in prices.
However, they warn that this relief could be temporary due to the effects of the trade measures implemented by Trump.
Tariffs and inflationary risks
The moderation of inflation comes at a time of high trade uncertainty.
Last week, President Trump imposed widespread tariffs, which led to significant declines in financial markets and a considerable decrease in both business and consumer confidence.
Although this Wednesday announced a 90-day suspension for some of these tariffs, it announced a 125% levy on all imports from China, in addition to a 25% on steel, aluminum, cars, and numerous products from China and Mexico.
According to analysts, "it is likely that the remaining tariffs will continue to drive inflation this year, even with the temporary suspension."
In fact, a report from the Federal Reserve in February indicated that 80% of surveyed companies plan to pass on cost increases to consumers.
60% stated that the price increase would be equal to or greater than the rise in their operating expenses.
Andy Schneider, an economist at BNP Paribas, noted that "given how much more the president has increased tariffs on China, the effective tariff rate in March is still not that different in total terms."
On its part, Goldman Sachs maintains a forecast of a 45% chance of recession this year in the U.S., expects economic growth to slow to 0.5%, and predicts that annual inflation could reach 3.5% by the end of 2025.
Federal Reserve Chair calls for prudence
In this context, the President of the Federal Reserve, Jerome Powell, stated last week that the central bank will maintain its key interest rate around 4.3% while evaluating the potential effects of Trump's trade policy.
"There is much to wait for and see, even on our part. And that seems to be the right approach in this period of uncertainty," Powell stated.
Trump, for his part, has publicly pressured the Fed to lower interest rates.
This week, he went as far as to claim on his platform Truth Social that "there is no inflation," arguing that the prices of oil and food were decreasing.
A promising piece of information, but with reservations
Although the figure of 2.4% fell short of predictions—which pointed to 2.5% or even 2.6%—analysts remain cautious.
"It is a better figure than expected, which at another time would be viewed with optimism, but now raises little enthusiasm given the forecast that the taxes will impact prices," experts note.
Although the announcement of the partial suspension of tariffs brought some relief to the markets, fears of an economic slowdown persist.
The relocation of supply chains out of China, a process that began during Trump's first term, is still underway and could have significant side effects on consumer prices.
The United States imported more than $450 billion in goods from China last year, including devices like iPhones, large volumes of clothing, shoes, and toys, products that could now become significantly more expensive.
Frequently Asked Questions about Inflation and Tariffs in the U.S. in 2025
What was the inflation rate in the U.S. in March 2025?
The annual inflation rate in the United States fell in March to 2.4%, marking a decrease of four tenths from the 2.8% recorded in February. This decline is mainly attributed to falling gasoline prices, although food costs have increased.
How have Trump's tariffs affected the U.S. economy?
The tariffs imposed by President Donald Trump have generated economic uncertainty and could be reversing the downward trend in inflation. Furthermore, experts warn that the tariffs could continue to drive inflation and have contributed to a decline in both business and consumer confidence.
Why have egg prices risen so much in the United States?
The prices of eggs in the U.S. have risen due to a deadly strain of avian flu that has affected millions of birds, reducing egg production. This, combined with inflation and restrictions on poultry farming in some states, has resulted in a significant increase in prices.
What measures has the U.S. government taken to control inflation?
The Trump administration has promoted policies such as mass deregulation and tax cuts, in addition to a focus on increasing energy production. However, the tariff measures have raised concerns about their negative impact on the economy.
What is expected for the U.S. economy by the end of 2025?
It is anticipated that there will be an economic slowdown with a 45% probability of recession by the end of 2025. Inflation could reach 3.5%, while tariffs and Trump's trade policy are factors that may continue to negatively impact the economy.
Filed under:
