By CHRISTOPHER RUGABER, Associated Press Economics Writer

WASHINGTON (AP) — U.S. inflation declined last month as the cost of gas fell, a sign that price growth was cooling even as President Donald Trump ramped up his tariff threats.

Consumer prices rose just 2.4% in March from a year earlier, the Labor Department said Thursday, down from 2.8% in February. That is the lowest inflation figure since September.

Excluding the volatile food and energy categories, core prices rose 2.8% compared with a year ago, down from 3.1% in February. That is the smallest increase in core prices in nearly four years. Economists closely watch core prices because they are considered a better guide to where inflation is headed.

The report shows that inflation is mostly cooling, for now. Yet President Donald Trump’s huge tariffs on China and 10% universal duty are likely to push up prices in the coming months, economists say. The higher import taxes will likely weigh on growth as well.

On a monthly basis, prices actually fell 0.1% in March, the first monthly drop in nearly five years. The cost of used cars, car insurance, and hotel rooms all fell. Core prices rose just 0.1% in March from February.

The cost of groceries, however, jumped 0.5% last month, the report showed, as egg prices leapt 5.9% to a new record average price of $6.23 a dozen.

Trump had imposed sweeping tariffs on nearly 60 nations last week, which sent financial markets into a tailspin and caused sharp drops in business and consumer sentiment. Yet on Wednesday he paused those duties for 90 days. He kept a steep 125% tariff on all imports from China and 25% duties on steel, aluminum, imported cars, and many goods from China and Mexico.

The remaining tariffs are still likely to lift inflation this year, economists say, even with the 90-day pause.

Even with the pause, many companies are still uncertain where trade policy will go next. Trump has also said that duties on pharmaceutical imports will be imposed.

Consumers will likely see some prices rise because of the existing duties, including the massive tariffs on China. The United States imports more than $60 billion of iPhones and other mobile phones every year from China, as well as massive amounts of clothes, shoes and toys.

Many U.S. companies will likely shift production out of China, a process that had already started during Trump’s first term when he slapped duties on some of its exports. Still, China remains the Unite States’ third-largest trading partner.

Shifting supply chains out of China will also likely take time and come with its own costs, which could raise prices for U.S. consumers in the coming months.

Last week, Federal Reserve Chair Jerome Powell said that the central bank was likely to keep its key interest rate unchanged at about 4.3% as it waited to see how Trump’s policies impacted the economy. Trump called for the Fed to cut rates on Friday.

“There’s a lot of waiting and seeing going on, including by us,” Powell said. “And that just seems like the right thing to do in this period of uncertainty.”

By MATT OTT, Associated Press Business Writer

Slightly more Americans filed for unemployment benefits last week, but the labor market remains broadly healthy despite an ongoing trade war.

Jobless claim filings inched up by 4,000 to 223,000 for the week ending April 5, the Labor Department said Thursday. That’s less than the 225,000 new applications analysts forecast.

Weekly applications for jobless benefits are considered a proxy for layoffs, and have mostly ping-ponged between 200,000 and 250,000 for the past few years.

Even though President Donald Trump put a 90-day pause on most of his widespread tariff hikes Wednesday, concerns remain about a global economic slowdown that could upend what has been an incredibly resilient labor market.

Like his pledge to institute tariffs, Trump’s promise to drastically downsize the federal government workforce is fully in motion.

It’s not clear when the job cuts ordered by the Department of Government Efficiency — or “DOGE,” spearheaded by Elon Musk — will surface in the weekly layoffs data,

Federal agencies that have either announced layoffs or are planning cuts include the Department of Health and Human Services, IRS, Small Business Administration, Veterans Affairs and Department of Education.

Despite showing some signs of weakening during the past year, the labor market remains healthy with plentiful jobs and relatively few layoffs.

Last week, the government reported that U.S. employers added a surprisingly strong 228,000 jobs in March and while the unemployment rate inched up to 4.2%, that’s a healthy figure by historical standards.

Some high-profile companies have announced job cuts already this year, including Workday, Dow, CNN, Starbucks, Southwest Airlines and Facebook parent company Meta.

The four-week average of applications, which aims to smooth out some of the week-to-week swings, was unchanged at 223,000.

The total number of Americans receiving unemployment benefits for the week of March 29 fell by 43,000 to 1.85 million.

By JOSH FUNK, Associated Press Business Writer

U.S. egg prices increased again last month to reach a new record-high of $6.23 per dozen despite President Donald Trump’s predictions, a drop in wholesale prices and no egg farms having bird flu outbreaks.

The increase reported Thursday in the Consumer Price Index means consumers and businesses that rely on eggs should not anticipate immediate relief. Demand for eggs is typically elevated until after Easter, which falls on April 20.

FILE – Cartons of eggs sit on a shelf in a Walmart store, March 10, 2025, in Englewood, Colo. (AP Photo/David Zalubowski, File)

Industry experts were expecting the index to reflect a drop in retail egg prices because wholesale egg prices dropped significantly in March. University of Arkansas agricultural economist Jada Thompson said the wholesale prices did not start dropping until mid-March, so there may not have been enough time for the average price for the month to decline. And grocery stores may not have immediately passed on the lower prices.

Bird flu outbreaks were cited as the major cause of price spikes in January and February after more than 30 million egg-laying chickens were killed to prevent the spread of the disease. Only 2.1 million birds were slaughtered in March and none of them were on egg farms

The farms that had fall outbreaks have been working to resume egg production after sanitizing their barns and raising new flocks, but chickens must be about six months old before they start laying eggs. Thompson said those farms did not come back online as quickly as anticipated.

Trump tried to take credit for the lower wholesale egg prices the U.S. Department of Agriculture reported in recent weeks. But experts say the president’s plan to fight bird flu by focusing on strengthening egg farmers’ defenses against the virus is likely to be more of a long-term help.

Since the current bird flu outbreak began, more than 168 million birds have been slaughtered, most of them egg-laying chickens. Any time a bird gets sick, the entire flock is killed to help keep bird flu from spreading. That can have an effect on the egg supply because massive egg farms may have millions of birds.

The disease is difficult to control because it is spread easily through the droppings of wild birds that carry the avian flu virus. Bird flu has also inflected other animals, including dairy cattle.

Egg prices hit $5.90 in February one month after setting a record at $4.95 per dozen, according to the U.S. Bureau of Labor Statistics. But shoppers encountered prices much higher than that in some places; in California, the price per dozen topped $12 in some stores.

Earlier in the outbreak, egg prices spiked to hit $4.82 in January 2023 before gradually falling as low as $2.04 per dozen in August 2023. Generally, prices have since increased steadily.

By YURI KAGEYAMA and MATT OTT, Associated Press Business Writers

Markets on Wall Street Thursday were poised to gave back some of the historic gains made a day earlier when President Donald Trump paused his latest tariff hikes on U.S. trading partners, with the exception of China.

Futures for the S&P 500 were down 1.7% before the bell, while futures for the Dow Jones Industrial Average dropped 1.4%. Nasdaq futures gave back 2%.

It’s been a wild couple of weeks on Wall Street with Trump’s tariff announcements, reversals and retaliation from U.S. trading partners. That volatility seems unlikely to change in the coming weeks with the U.S. and China still locked in a tit-for-tat tariff battle and earnings season kicking off on Friday with the latest results from some of the nation’s biggest banks.

In early trading Thursday, technology stocks were the biggest drag on markets, followed by the industrial and the financial sectors.

Coming later in the morning are the U.S. government’s latest consumer inflation data and the weekly layoffs report.

On Wednesday, the S&P 500 surged 9.5%, its third-best day since 1940. The index is still below where it was when Trump announced his sweeping set of tariffs last week.

The Dow Jones Industrial Average shot to a gain of nearly 3,000 points, or 7.9%. The Nasdaq composite leaped 12.2%.

Investors went “from fear to euphoria,” Stephen Innes, managing partner at SPI Asset Management, said in a commentary.

“It’s now a manageable risk, especially as global recession tail bets get unwound, and most of Asia’s exporters breathe a massive sigh of relief,” Innes said.

Following the hard-to-fathom rebound in U.S. markets Wednesday, world markets soared on Thursday, with Japan’s benchmark jumping more than 9%.

Chinese shares saw more moderate gains, given yet another jump in the tariffs each side is imposing on each others’ exports.

In Europe, Germany’s DAX initially gained more than 8%, but lost some of that momentum and were up 5.7% at midday. The CAC 40 in Paris gained 5.6% and Britain’s FTSE 100 surged 4.3%.

Analysts had expected the global comeback given that U.S. stocks had one of their best days in history on Wednesday as investors registered their relief over Trump’s decision.

“Everything is still very volatile, because with Donald Trump, you don’t know what to expect,” said Francis Lun, chief executive of Geo Securities. “This is really big uncertainty in the market. The threat of recession has not faded.”

Markets had been sinking earlier Wednesday on worries that Trump’s trade war could drag the global economy into a recession. But then came the posting on social media that investors worldwide had been waiting and wishing for.

“I have authorized a 90 day PAUSE,” Trump said, saying more than 75 countries are negotiating on trade and not retaliating against his latest increases in tariffs. China was a huge exception, with Trump saying tariffs are going up to 125% against its products.

The trade war is not over, and an escalating battle between the world’s two largest economies can create plenty of damage. U.S. stocks are also still below where they were just a week ago.

In Asia, Japan’s benchmark Nikkei 225 jumped 9.1% to finish at 34,609.00, zooming upward as soon as trading began.

Australia’s S&P/ASX 200 soared 4.5% to 7,709.60. South Korea’s Kospi gained 6.6% to 2,445.06. Hong Kong’s Hang Seng added 2.1% to 20,681.78. The Shanghai Composite rose 1.2% to 3,223.64.

In energy trading, benchmark U.S. crude fell $1.66 to $60.69 a barrel. Brent crude, the international standard, gained $1.01 to $63.83 a barrel.