Consumer prices in the United States declined in March, marking the first monthly drop since May 2020 and only the second since the inflation surge under the Biden-Harris administration.
The new report contradicts predictions that President Donald Trump’s tariff and trade policies would drive up costs.
According to the U.S. Bureau of Labor Statistics, the Consumer Price Index (CPI) fell by 0.1 percent in March compared to February.
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This marks the first monthly decline in prices since the summer of 2022.
Economists had projected a 0.1 percent increase for the month, but prices instead dropped, surprising forecasters and supporting President Trump’s claim that consumer prices could be brought down.
Core consumer prices — which exclude the more volatile food and energy categories — rose just 0.1 percent for the month.
That figure is lower than the 0.3 percent rise analysts had expected and represents the smallest increase in core prices since Trump’s first term in office.
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On the campaign trail, Trump has emphasized the importance of lowering consumer costs, saying:
“Starting on day one, we will end inflation and make America affordable again, to bring down the prices of all goods.”
Many economists had argued that while inflation could slow, the actual price level was unlikely to fall.
The March report shows that prices not only stabilized, but in some cases, decreased — a direct contradiction to the outlook from those critical of Trump’s economic proposals.
Energy prices saw a notable drop in March, falling by 2.4 percent.
Gasoline prices in particular dropped by 6.3 percent.
Several other categories also saw price relief for consumers, including:
- Airline fares
- Motor vehicle insurance
- Used cars and trucks
- Recreation
Prices for new vehicles edged up slightly by 0.1 percent, remaining unchanged compared to one year ago.
Smartphone prices declined 1.1 percent in the month.
Clothing prices also rose by 0.4 percent, though that is unchanged from the previous month.
However, not all areas saw price relief. Food costs increased across the board.
Grocery prices rose 0.5 percent, and the cost of dining out rose 0.4 percent.
Egg prices were among the food categories that saw a noticeable spike.
Core goods prices dropped 0.1 percent, while core services prices rose 0.1 percent — the smallest monthly gain in that category since August 2021.
Compared to one year earlier, the CPI is up 2.4 percent, the smallest year-over-year gain since February 2021.
Core prices have risen 2.8 percent annually, the lowest annual core inflation rate since March 2021.
The report suggests that efforts to reduce inflation are gaining traction, particularly under Trump’s renewed influence on economic policy.
The continued decline in energy prices, in particular, appears to have contributed significantly to the overall drop in consumer costs.
The figures released this week could play a key role in upcoming policy discussions and will likely feature heavily in campaign messaging as the Trump administration works to reinforce its economic record heading into the remainder of the year.
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