U.S. inflation dips in March as energy prices fall

U.S. inflation slowed sharply in March, with prices dipping for the first time in nearly four years, according to new federal data released Thursday.

The decline was driven largely by falling energy costs, though economists warn that President Donald Trump’s sweeping new tariffs could reverse the trend in the coming months, according to reports.

The Consumer Price Index (CPI) fell 0.1% from February, marking the first monthly drop since May 2020, the Bureau of Labor Statistics reported. Annual inflation eased to 2.4%, down from 2.6% in February and below economists’ expectations.

The slowdown was partly due to declining energy prices, which fell after seasonal adjustments. Grocery costs, however, rose 0.5% from the previous month, with egg prices surging 5.9% amid lingering supply disruptions from avian flu outbreaks. Over the past year, egg prices have jumped more than 60%.

Core CPI, which excludes volatile food and energy prices, rose just 0.1% in March, bringing the annual rate down to 2.8% — the lowest in nearly four years.

While the report suggests easing price pressures, economists caution that Trump’s aggressive new tariffs on imports could soon push costs higher for consumers and businesses. The measures, the most significant U.S. tariff hike in over a century, threaten to disrupt global trade and drive up prices on a wide range of goods.