{"id":405,"date":"2025-04-30T14:33:33","date_gmt":"2025-04-30T14:33:33","guid":{"rendered":"http:\/\/www.soapandseife.com\/?p=405"},"modified":"2025-05-03T23:40:47","modified_gmt":"2025-05-03T23:40:47","slug":"us-inflation-cools-and-americans-step-up-spending-as-they-brace-for-tariff-impact","status":"publish","type":"post","link":"http:\/\/www.soapandseife.com\/index.php\/2025\/04\/30\/us-inflation-cools-and-americans-step-up-spending-as-they-brace-for-tariff-impact\/","title":{"rendered":"US inflation cools and Americans step up spending as they brace for tariff impact"},"content":{"rendered":"

By CHRISTOPHER RUGABER, AP Economics Writer<\/strong><\/p>\n

WASHINGTON (AP) \u2014 A closely watched inflation gauge cooled last month in a sign that prices were steadily easing before most of President Donald Trump\u2019s\u00a0tariffs were implemented<\/a>.<\/p>\n

At the same time, consumers accelerated their spending, particularly on cars, likely in an effort to\u00a0get ahead of the duties<\/a>.<\/p>\n

Wednesday\u2019s report from the Commerce Department showed that consumer prices rose just 2.3% in March from a year earlier, down from 2.7% in February. Excluding the volatile food and energy categories, core prices rose 2.6% compared with a year ago, below February\u2019s 3%. Economists track core prices because they typically provide a better read on where inflation is headed.<\/p>\n

The slowdown in inflation could be a temporary respite until the widespread duties imposed by Trump begin to push up prices in many categories. Most economists expect inflation to start picking up in the coming months.<\/p>\n

\u201cCore inflation will inevitably rebound sharply in the coming months,\u201d Harry Chambers, assistant economist at Capital Economics, said in an email. \u201cGoods prices will rise much more strongly.\u201d<\/p>\n

Chambers expects core inflation will near 4% by late this year.<\/p>\n

Wednesday\u2019s report also showed that consumer spending increased 0.7% from February to March, a healthy gain. Much of the increase appeared to be driven by efforts to get ahead of duties, such as Trump’s 25% duty on imported cars, which took effect April 3. Spending on autos surged 8.1% in March. Still, that means auto sales are likely to fade in the coming months because those assets have already been secured.<\/p>\n

But spending on restaurants and hotels also jumped after falling in February, a sign Americans are still willing to splurge a little on travel and dining out.<\/p>\n

The spending increase is noteworthy because consumer confidence surveys have plunged for several months, suggesting Americans have grown increasingly worried about the economy. Yet so far, that hasn’t translated into a noticeable slowdown in spending.<\/p>\n

Yet many economists expect it will come soon. Some businesses are already seeing it, including some airlines.<\/p>\n

And Sheryl Tubbs, an Idaho-based creator behind DenimFelt, which converts secondhand denim into stuffed animals and puppets, opened her Etsy shop in late 2019 as a way to supplement her husband\u2019s income. She buys supplies like boxes, buttons and thread from Chinese sellers on Amazon and benefited from the fact that small shipments from overseas have been exempt from tariffs, under what’s known as the \u201c\u00a0de minimis exemption<\/a>.\u201d But the Trump administration has now closed that loophole.<\/p>\n

Prices for the supplies she buys from China are already rising. On top of that, sales dropped 50% over the past month as her customers pulled back. She will have to raise prices by a dollar or two on her items, which average about $50. But she\u2019s also coming up with new ways to market her business like selling at a local festival and digitizing her patterns so she can sell them.<\/p>\n

\u201cI definitely have to be more creative and come up with better ways of doing it to compete,\u201d she said.<\/p>\n

Earlier Wednesday, the government reported that consumer spending slowed in the first three months of the year, compared with last year\u2019s final quarter, as bad weather depressed shopping and Americans took a breather after healthy spending over the winter holidays.<\/p>\n

The\u00a0nation\u2019s economy actually shrank 0.3%<\/a> in the January-March quarter as imports surged as companies sought to get ahead of Trump\u2019s tariffs.<\/p>\n