For the first time since May 2020, the consumer-price index (CPI) recorded a month-over-month decline, dropping 0.1% within the month of March, as reported by the U.S. Labor Department. The dip wasn’t anticipated and caught economists off guard, as forecasts had predicted a 0.1% increase instead. Year-over-year inflation also posted a significant slowdown, cooling to 2.4%, which is below the 2.6% that Wall Street had anticipated.
Even with the recent CPI data shining a positive light on inflation, economists are realistic about future reports. This is especially true given Trump’s recent Liberation Day announcement regarding a sea of new tariffs, where the real inflation impact most likely won’t take effect until at least another month or so.
Related Article: U.S. Consumer Sentiment Tanks Over Inflation Fears According to Survey
CPI Report Shows Inflation Cooling with Declines in Gas, Travel, and Insurance
Core inflation saw drops within various categories, including a 0.7% monthly decrease in used car and truck prices, a 1.1% decline in medical care commodities, a 0.8% drop in motor vehicle insurance, and a notable 5.3% reduction in airline fares.
Commenting on this, David Kelly, the chief global strategist at JP Morgan Asset Management, made the following statement: “It is the calm before the inflation storm. We’re going to get some higher inflation out of the tariffs. What we’re seeing is a lot of softness in the travel industry, which I think is going to get worse over the course of this year.”
Additionally, the energy index fell by 2.4% in March after increasing 0.2% in February and 1.1% in January. On an annual scale, the energy index declined by 3.3%, largely moved by a sharp drop in gas prices. However, food costs continued to climb, as grocery prices rose by 0.4% in March.
March’s inflation report shows Americans’ purchasing power continues to grow:
— decline in inflation was driven by a 2.4% decline in energy prices;
— gas prices plunged 6.3%;
— core CPI rose 2.8% over past 12 months – smallest yearly increase since March 2021;
— average… pic.twitter.com/m7SO7lfL11
— Rep. Scott Perry (@RepScottPerry) April 10, 2025
Economists Believe Positive Data Could Be Short-Lived
With excitement, Trump, on Truth Social, posted, “INFLATION IS DOWN!!!.” However, with tariffs looming, economists warn the dip is short-lived and prices are expected to rise soon, likely reversing some of March’s improvements.
Since U.S. importers such as Walmart, for example, pay tariffs when receiving foreign goods, they often transfer some or all of the tariff expenses to consumers by increasing prices. Robert Frick, corporate economist at Navy Federal Credit Union, comments on the reality of the situation, “We’re likely going to be driving off a cliff here pretty soon. Let’s not put blinders on, because the situation is still perilous for prices.”
On top of this, stocks surged on Wednesday following Trump’s announcement that he was halting several of the tariffs he had recently introduced. This, coupled with the positive March CPI report, didn’t keep the Wall Street momentum going. Instead, the attention of investors seems to have been shifted to concerns about the future. This is revealed by the fact that markets tumbled sharply on Thursday, reflecting lingering fears that tariffs could impact economic growth while driving inflation higher in the long term.
Investors Make Their Move Before Inflation Pushes Prices Up Further
With all signs pointing towards tariffs pushing the cost of goods and services up in the very near future, investors are jumping into the market now before more inflation sets in. They’re making their move because seasoned investors realize that it’s never a wise choice to “wait and see” – a strategy and costly mistake that can cost an investor thousands of dollars in lost profits.
Related Article: Investors Gain Edge in Market Dominated by Inflation, High Rents and Low Housing Inventory
Within the mix we see housing prices have been on the rise for the past few years and are sure to continue on their upward trend as the impact of the Trump Administration’s tariff policy kicks in. That said, if you’re contemplating investing in a new construction rental, now is the time to take action, and Morris Invest can quickly make it happen for you.
Our team can get you set up with a built-to-rent property in a lucrative housing market, assign an experienced property manager to your rental, as well as place a tenant so you’re cash flowing from the start. If your interest has been sparked, feel free to schedule a 30-minute call with Morris Invest and we can help you achieve your investing and financial goals.
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Before you go, watch the following video that takes a deep dive into the tariff trade war between the U.S. and China:
