The U.S. Bureau of Labor Statistics reported that the Consumer Price Index for All Urban Consumers (CPI-U) increased by 2.3% year-over-year in April 2025, a decrease from March's 2.4%. This marks the smallest annual increase since February 2021. Despite this moderation, inflation remains slightly above the Federal Reserve's 2% target.
On a monthly basis, the CPI rose by 0.2% in April, following a 0.1% decrease in March. Declines were noted in prices for airline fares and communication. Conversely, the index for shelter rose 0.3% in April, and other indexes with notable increases over the last year include medical care (+2.7 percent) and motor vehicle insurance (+6.4 percent).
Recent economic events, including tariff adjustments between the U.S. and China, have contributed to market volatility. The U.S. has agreed to a 90-day temporary reduction in tariffs, lowering the tax on Chinese imports from 145% to 30%, while China will reduce tariffs on U.S. goods from 125% to 10%. This sparked a stock market rally, with the Dow Jones Industrial Average soaring over 1,000 points on the news. Gasoline prices are at $3.14 a gallon as of early May, down 11.8% over the past year.