U.S. Housing Inflation Numbers Still Relatively Mild Amid Tariffs

While new tariffs under the Trump administration have caused heightened uncertainty in the stock market over the past month, it seems inflation has fared relatively well under the circumstances.

The consumer price index (CPI) for all items rose 2.3 percent annually in April, a decrease from the 2.8 percent increase seen over the 12-month period ending in February, according to a Tuesday report from the U.S. Bureau of Labor Statistics (BLS).

The April change was the smallest 12-month increase in the all-items index since February 2021, according to the BLS.

Meanwhile, the shelter index, a general gauge of housing costs, increased 0.3 percent in April from last month, accounting for more than half of the all-items monthly increase, the report found. Housing inflation also increased 4 percent over the last year, compared to a yearly increase of 4.2 percent reported in February.

A spokesperson for the BLS did not immediately respond to a request for comment.

The relatively low inflation numbers come as a bit of a surprise given President Donald Trump’s “Liberation Day” tariffs announced at the beginning of April, which implemented a 10 percent baseline tax on imports from all countries and were set to have a detrimental impact on the country’s construction industry, among other fields.

Import taxes on construction materials such as aluminum and steel are set to send construction costs skyrocketing, and in turn spur a slowdown in new construction. In fact, the industrial development pipeline in the U.S. has already dropped 62 percent to 306.9 million square feet from its peak during the fourth quarter of 2022 of 806.9 million square feet, as Commercial Observer previously reported.

“Expect a long-term trend toward more domestic-oriented supply chains, strategic inventory management driving space needs, and higher construction costs necessitating more efficient designs,” Gregory Healy, executive vice president and head of industrial services at Savills, told CO last week.

Trump has since eased off on many of his tariffs, though, coming to an agreement Monday with China to pause the highest tariff levels on that country for 90 days. While the pause is welcome for U.S. developers and retailers alike, many companies have said higher prices are likely here to stay.

Isabelle Durso can be reached at idurso@commercialobserver.com.