Quick Hit:

U.S. consumer prices dipped in March, defying predictions that Trump’s proposed tariffs would trigger higher inflation. The decline in the Consumer Price Index marks the first monthly drop in nearly three years—and only the second since inflation spiked under former President Biden.

Key Details:

• March’s 0.1% decline in overall prices came as a surprise to economists, who had expected a 0.1% increase. Core prices—excluding food and energy—rose by just 0.1%, well below the 0.3% that had been forecast.

• The price of energy dropped 2.4% for the month, led by a sharp 6.3% decline in gasoline. Other falling categories included airfares, used vehicles, motor vehicle insurance, and smartphones.

• After nearly three years of steady increases, March's report shows that prices aren't just rising more slowly—they’re actually falling, marking a reversal in the inflation trend since Trump took office.

Diving Deeper:

Consumer prices fell in March, delivering a political and economic win for President Donald Trump, who has repeatedly promised to reverse the surge in inflation seen under Biden. The Consumer Price Index dropped 0.1% from February, the first month-over-month decline since mid-2021. The dip defied most economists’ expectations and marked a significant shift from the persistent inflation Americans endured under Biden.

“Starting on day one, we will end inflation and make America affordable again,” Trump had vowed on the campaign trail. March’s report gives weight to that promise, as the numbers suggest prices not only stabilized—but in some cases fell.

Energy prices led the drop, with gasoline falling 6.3% in March alone. Airline tickets, auto insurance, and used cars also saw notable declines. Smartphones dropped 1.1%, contributing to a 0.1% decline in overall core goods prices.

Core services prices—which include things like shelter and healthcare—rose by 0.1%, the smallest monthly gain in more than three years. Year-over-year, core inflation now stands at 2.8%, the lowest since March 2021. Overall annual inflation eased to 2.4%, its weakest pace since early 2021.

Economists had long insisted that tariffs—particularly Trump’s call for a 10% across-the-board tariff—would raise consumer prices. But the March data shows otherwise. Trump allies argue the report is proof that his economic agenda can drive down prices without triggering widespread inflation, countering the narrative pushed by Democrats and the MSM.