WASHINGTON (AP) — A key U.S. inflation gauge slowed last month as President Donald Trump’s tariffs have yet to noticeably push up prices. Spending by Americans slowed despite rising incomes, potentially an early reaction to higher prices on some imported goods.
Friday’s report from the Commerce Department showed that consumer prices rose just 2.1% in April compared with a year earlier, down from 2.3% in March and the lowest since September. Excluding the volatile food and energy categories, core prices rose 2.5% from a year earlier, below the March figure of 2.7%, and the lowest in more than four years. Economists track core prices because they typically provide a better read on where inflation is headed.
The figures show inflation is still declining from its post-pandemic spike, which reached the highest level in four decades in July 2022. Economists and some business executives have warned that prices will likely head higher as Trump’s widespread tariffs take effect, though the timing and impact of those duties are now in doubt after they were struck down late Wednesday in court.
On a monthly basis, overall prices and core prices both increased just 0.1% from March to April. The cost of big-ticket manufactured goods rose a hefty 0.5%, though that increase was offset by a 0.1 decline in other goods, such as groceries. The cost of services rose just 0.1% from March to April.
The big increase in durable goods prices could reflect the early impact of tariffs. Americans also cut back their spending on longer-lasting factory goods in April, the report showed.
Overall consumer spending — which includes spending on services — rose 0.2% in April from March, the report said, but that’s down from a big 0.7% rise in March.
The slowdown in spending could reflect some early caution on the part of consumers, economists said, in response to higher goods prices. It also suggests that some of the spending jump in March reflected consumers purchasing items like cars to get in front of the impact of tariffs.
“The pulling forward of consumer spending ahead of the tariff increases will continue to dampen household spending in the coming months, especially as they face higher prices and a softening labor market,” Kathy Bostjancic, chief economist at Nationwide, said in an email. “We anticipate that the improved inflation trend will reverse in the second half of the year as companies are forced to begin passing along a portion of the increased tariffs in order to protect profit margins.”
Walmart executives said earlier this month that the retail giant would increase prices for many products in May and June to account for the tariffs, while electronics chain Best Buy's CEO Corie Barry said Thursday the company is increasing some prices as well because of the duties, as a “last resort.”
Makeup company E.l.f. Beauty, which sources 75% of its products from China, said earlier this week it would raise its prices by $1 a product starting Aug. 1 to offset the cost of tariffs.
And on Thursday, warehouse retailer Costco said it has already raised prices for some products, but has held the line on others. The company largely absorbed the duties on pineapples and bananas “because they are key staple items” and “we felt it was important to really eliminate the impact there,” said Gary Millerchip, Costco's chief financial officer.
But the company did increase prices for flowers from Central and Source America, for example, “because we felt that was something that the member would be able to absorb," Millerchip added.
At the same time, incomes — before adjusting for inflation — rose a healthy 0.8% in April. Much of that gain reflected an increase in Social Security benefits for some retired teachers, fire fighters, and federal workers whose incomes previously weren't fully counted toward Social Security benefits.
The inflation-fighters at the Federal Reserve said at their most recent meeting May 6-7 that inflation is still elevated, compared to their target of 2%. Fed officials, who focus more on core prices, broadly support keeping their key interest rate steady while they evaluate the impact of the tariffs on inflation and jobs.
The court ruling last Wednesday said that most of Trump’s tariffs were unlawful, including his duties on imports from Canada, Mexico, and China, as well as those on more than 50 other countries. Tariffs on steel, aluminum, and cars were implemented under different laws and remain in place.
But the duties were allowed to remain in effect while the Trump administration appeals the ruling against them. And administration officials say they will find other legal authorities, if needed, to implement the tariffs. As a result, what tariffs will end up in place and for how long remains highly uncertain.
A shopper surveys goods on display in a Costco warehouse Wednesday, May 21, 2025, in Lone Tree, Colo. (AP Photo/David Zalubowski)
MELBOURNE, Australia (AP) — Auckland was the first major city to ring in 2026 with a fireworks display launched from New Zealand’s tallest structure, Sky Tower, followed by a defiant celebration in Australia in the aftermath of its worst mass shooting.
South Pacific countries were the first to bid farewell to 2025. Clocks stuck midnight in Auckland 18 hours before the famous ball drop in New York’s Times Square. The five-minute display involved 3,500 fireworks.
Australia’s east coast welcomed 2026 two hours after New Zealand. In Sydney, the country's largest city, celebrations were held under the pall of Australia’s worst mass shooting in almost 30 years. Two gunmen targeted a Hannukah celebration at Bondi Beach on Dec. 14, killing 15 and wounding 40.
A heavy police presence monitored the thousands who thronged to the waterfront to watch a fireworks show centered on the Sydney Harbor Bridge. Many officers openly carried rapid-fire rifles, a first for the annual event.
An hour before midnight, the massacre victims were commemorated with a minute of silence while images of a menorah were projected on the bridge pylons. The crowd was invited to show solidarity with Australia’s Jewish community.
New South Wales Premier Chris Minns urged Sydney residents not to stay away through fear, saying extremists would interpret smaller crowds at New Year’s Eve festivities as a victory.
“We have to show defiance in the face of this terrible crime and say that we’re not going to be cowered by this kind of terrorism,” he said.
In Indonesia, one of Australia’s nearest neighbors, cities scaled back festivities as a gesture of solidarity with communities devastated by floods and landslides that struck parts of Sumatra island a month ago, claiming more than 1,100 lives.
The capital, Jakarta, was not ringing in 2026 with its usual fanfare, choosing subdued celebrations with a program centered on prayers for victims, city Gov. Pramono Anung said last week.
Makassar Mayor Munafri Arifuddin urged residents of one of Indonesia’s largest cities to forgo parties, calling for prayer and reflection. "Empathy and restraint are more meaningful than fireworks and crowds,” he said.
Concerts and fireworks on Indonesia’s tourist island of Bali were canceled and replaced with a cultural arts event featuring traditional dances.
Hong Kong, too, was ringing in 2026 without the usual spectacle in the sky over iconic Victoria Harbor, after a massive fire in November killed at least 161 people.
The facades of eight landmarks were turning into giant countdown clocks presenting a three-minute light show at midnight.
Many parts of Asia welcome the new year by observing age-old traditions.
In Japan, crowds were gathering at a Buddhist temple in Tokyo for a bell striking at midnight. In the South Korean capital, Seoul, a bell tolling and countdown ceremony were being held at the Bosingak Pavilion.
Tourists and Berliners alike marked the end of 2025 by enjoying snowfall, taking selfies and making snowmen in front of the German capital's cathedral and the iconic Brandenburg Gate. The Berlin TV Tower was nearly invisible thanks to the falling flakes and fog.
Greece and Cyprus were ringing in 2026 by turning down the volume, replacing traditional fireworks with low-noise pyrotechnics, light shows and drone displays in capital cities. Low-noise fireworks avoid the explosive bursts that generate the loud cracks of traditional displays.
Officials in the countries said the change is intended to make celebrations more welcoming for children and pets, particularly animals sensitive to loud noise.
Police in New York City will have additional anti-terrorism measures at the Times Square ball drop, with “mobile screening teams” in search of suspicious activity. It is not in response to a specific threat, according to NYPD Commissioner Jessica Tisch.
Zohran Mamdani will take office as mayor at the start of 2026. Two swearing-in ceremonies are planned, starting with a private ceremonial event around midnight in an old subway station.
Saaliq reported from New Delhi, India. Associated Press writers around the world contributed to this report.
The police stand guard during the 2026 Taipei New Year's Party celebration in front of the Taipei City Government Building in Taipei, Taiwan, Wednesday, Dec. 31, 2025. (AP Photo/Chiang Ying-ying)
People gather to celebrate the New Year at the Zojoji Buddhist temple, on Wednesday, Dec. 31, 2025 in Tokyo. (AP Photo/Eugene Hoshiko)
A Buddhist prays in front of lanterns on New Year's Eve at the Jogye temple in Seoul, South Korea, Wednesday, Dec. 31, 2025. (AP Photo/Lee Jin-man)
Fireworks burst over the Sydney Harbour Bridge during the New Year celebrations in Sydney, Thursday, Jan. 1, 2026. (AP Photo/Rick Rycroft)
Swimmers enter the water during the traditional Sylvester swim at lake Moossee in Moosseedorf, Switzerland, Wednesday, Dec. 31, 2025. (Anthony Anex/Keystone via AP)
A child poses for a photo with a prosperity decoration to welcome 2026 Year of the Horse, following the Chinese zodiac at a shopping district on new year's eve, in Beijing, Wednesday, Dec. 31, 2025. (AP Photo/Andy Wong)
A person walks by illuminated decorations on New Year's Eve in Seoul, South Korea, Wednesday, Dec. 31, 2025. (AP Photo/Lee Jin-man)
Fireworks burst over the Sydney Harbour Bridge as New Year's celebrations begin in Sydney, Wednesday, Dec. 31, 2025. (AP Photo/Rick Rycroft)
Fireworks burst over the Sydney Harbour Bridge as New Year's celebrations begin in Sydney, Wednesday, Dec. 31, 2025. (AP Photo/Rick Rycroft)
Ryan Seacrest and Rita Ora, hosts of "Dick Clark's New Year's Rockin' Eve with Ryan Seacrest 2026," in New York at the New Year's Eve Times Square Ball on Tuesday, Dec. 30, 2025. (AP Photo/Ted Shaffrey)
A vendor sells New Year's eve party goods at a market in downtown Lima, Peru, Tuesday, Dec. 30, 2025. (AP Photo/Guadalupe Pardo)
A families pose for a photo with a prosperity decoration to welcome 2026 Year of the Horse, following the Chinese zodiac as people visit a shopping district on new year's eve, in Beijing, Wednesday, Dec. 31, 2025. (AP Photo/Andy Wong)
A child poses for a photo with a prosperity decoration to welcome 2026 Year of the Horse, following the Chinese zodiac at a shopping district on new year's eve, in Beijing, Wednesday, Dec. 31, 2025. (AP Photo/Andy Wong)
