What To Expect From Tuesday’s Report On Inflation

You may see some price increases from tariffs in your recent shopping trips, but you won’t see them in Wednesday’s official report on inflation in April, forecasters say. 

A report on the Consumer Price Index by the Bureau of Labor Statistics on Tuesday is likely to show the cost of living rose 2.3% over the 12 months ending in April, according to a survey of economists by Dow Jones Newswires and the Wall Street Journal. That would be the lowest inflation since February 2021, before inflation flared in the wake of the pandemic.

President Donald Trump’s sweeping tariffs against U.S. trading partners are still likely to push up consumer prices, economists said. Merchants are expected to pass the cost of the import taxes on to consumers.

However, since many of the tariffs announced so far weren’t implemented until April, tariff inflation may not make much of a dent in official data for at least a few months. Some businesses had stockpiled inventory from abroad before the tariffs went into effect, giving them some financial breathing room to wait and see if the tariffs stay in place before adjusting their prices.

“Despite the actualization of tariffs, we do not expect April to be a light-switch moment in goods inflation,” economists at Wells Fargo Securities wrote in a commentary. “The pull-forward of imports, efforts not to alienate customers and general confusion over policy changes are likely to result in a more incremental strengthening in prices.”

Forecasters at Goldman Sachs said tariff price increases would likely hit in the three months following them going into effect, with other prices continuing to rise through the rest of the year as the effects ripple through the economy.

As for April, price increases likely stayed relatively tame by most measures. “Core” inflation, which excludes volatile prices for food and energy, is expected to rise 2.8% over the year, the same as in March, according to the median forecast.