Economic Outlook: April 2025

Key data trends shaping the economy.

04/25/2025

In March, the Consumer Price Index for All Urban Consumers (CPI-U) declined by 0.1% on a seasonally adjusted basis, following a 0.2% rise in February. Over the past 12 months, the overall index rose 2.4% before seasonal adjustment. The energy index dropped 2.4% in March, driven by a 6.3% fall in gasoline prices, while food prices increased by 0.4%, with both grocery and dining-out costs rising. Core inflation (excluding food and energy) rose 0.1% for the month, with gains in categories like personal care and medical care, though airline fares and used vehicle prices declined. Year-over-year, core inflation rose 2.8%, its lowest since March 2021, while energy prices fell 3.3% and food prices rose 3%.

In March, total nonfarm payroll employment increased by 228,000, outpacing the 12-month average of 158,000, while the unemployment rate remained steady at 4.2%. Job growth was strongest in health care, social assistance, retail trade and transportation and warehousing, with some gains reflecting the return of workers from a strike. Meanwhile, federal government employment declined, and employment levels in other major industries showed little change. Average hourly earnings rose by 0.3% to $36, marking a 3.8% increase over the past year.

According to household survey data, both the unemployment rate and the number of unemployed individuals (7.1 million) remained relatively unchanged. Unemployment rates by demographic group showed minimal shifts. The number of long-term unemployed stayed at 1.5 million, representing 21.3% of all unemployed individuals. Similarly, the labor force participation rate (62.5%) and employment-population ratio (59.9%) were little changed. The number of people employed part time for economic reasons remained at 4.8 million, while 5.9 million people outside the labor force still wanted a job but weren’t actively seeking one. The number of marginally attached and discouraged workers also showed little movement in March.

In March, the Producer Price Index (PPI) for final demand declined by 0.4% on a seasonally adjusted basis, following increases of 0.1% in February and 0.6% in January. Over 70% of the March drop was due to a 0.9% decrease in prices for final demand goods, primarily driven by a sharp 11.1% fall in gasoline prices, along with declines in other energy and food items. Final demand services also fell by 0.2%, led by lower trade service margins and decreased transportation and warehousing costs. However, core PPI, which excludes food, energy and trade services, rose slightly by 0.1%. Over the past 12 months, the overall PPI increased 2.7%, while the core measure rose 3.4%.

U.S. import prices declined 0.1% in March, marking the first monthly drop since September 2024, as lower fuel import prices—particularly a 2.3% drop driven by petroleum and natural gas—offset gains in nonfuel imports. Over the past year, import prices rose 0.9%, with fuel import prices falling 5.2% and nonfuel imports rising 1.5%. Nonfuel import prices edged up 0.1% in March, supported by increases in capital goods, nonfuel industrial supplies and food-related imports. Among finished goods, capital goods prices rose 0.3%, while automotive vehicle prices fell for the fourth consecutive month and consumer goods prices declined 0.2%. Export prices were unchanged in March, following a 0.5% rise in February.

U.S. export prices were unchanged in March after rising in the previous two months, with the overall index up 2.4% over the past year. Agricultural export prices held steady, as higher soybean prices offset declines in wheat and rice, contributing to a 1.4% year-over-year increase. Nonagricultural export prices dipped 0.1% in March—the first monthly decline since September 2024—due to lower prices for industrial supplies and nonagricultural foods, though they rose 2.5% over the year. Despite this monthly dip, prices for finished goods increased across the board, including capital goods (+0.5%), automotive vehicles (+0.2%) and consumer goods (+0.3%), driven by gains in machinery, electronics and jewelry.