ROANOKE, Va. – Americans may finally be catching a break from rising prices—but economists warn that relief may not last long.
The latest inflation report shows consumer prices rose 2.3% year on year in April, marking the slowest increase since February 2021. But with President Trump’s new tariffs on the horizon, economists say price hikes could pick up again later this year.
“If tariffs are imposed, it usually takes time for them to be reflected in producer prices and the final goods and services prices,” said Dr. Can Dogan, Associate Professor of Economics at Radford University. “If they are imposed, we’ll probably see the effects late summer. Starting from those goods that are heavily imported from China or other trading partners, where tariffs are set.”
The Federal Reserve is holding interest rates steady for now, but growing anxiety from both consumers and small business owners is hard to ignore. Roanoke shop owner Tony Hash says tariff announcements already led to his worst week in business since opening Boxwood Lane three years ago.
“We literally had one sale for the entire week,” Hash said. “And you cannot pay rent with one sale. We can’t survive if we try to absorb another 17% or 20% increase.”
Holding up a handmade nativity set, currently priced at $250, Hash added: “It will be well over $400 once we get through tariffs if they go through the way they are planning.”
According to the report, there have been a few signs of relief, gas prices have dipped, and eggs are cheaper, but rent remains on the rise. The latest data shows housing costs rose at 4% in April, almost equal to pre-pandemic levels.
“Housing and shelter, that’s also a big component of inflation, which is still high,” Dogan said. “There are a couple of components going in the right direction, lowering inflation, but there are significant risks out there waiting for us.”
According to The Yale Budget Lab, the average import tariff is now close to 18%, the highest since 1934. Economists say that kind of pressure could keep interest rate cuts off the table for months to come. For now, inflation uncertainty continues to hang over household budgets and small business bottom lines.