Consumer prices rose at the slowest pace since May 2021 as inflation showed signs of easing further in March. Latest data From the Bureau of Labor Statistics released Wednesday morning.
The Consumer Price Index (CPI) rose 0.1% from last month and 5.0% from a year earlier in March, a slowdown from February’s 0.4% monthly increase and 6% annual gain.
Both measures were slightly better than economic forecasts of a 0.2% month-on-month increase and a 5.1% annual increase, according to data from Bloomberg.
Inflation of 5% represents the slowest annual increase in consumer prices since May 2021, but is significantly higher than the Federal Reserve’s 2% target. The central bank has been raising interest rates to reduce inflation, but the central bank risks sending the economy into recession by raising rates too fast.
On a “core” basis, which strips out the more volatile costs of food and gas, prices in March rose 0.4% from the previous month and 5.6% from last year. Both measures were in line with economists’ expectations, according to Bloomberg data.
Core inflation was particularly sticky last month amid rising rents. Both the index for rents and the index for owners’ equivalent rents rose 0.5% in March, following large increases in the previous month. Owners’ Equitable Rent is the hypothetical rent paid by a landlord.
The accommodation index increased by 8.2% over last year, accounting for more than 60% of the total increase in core inflation.
U.S. stocks rose in premarket trading immediately after the data was released. Treasury yields also moved to the upside.
The energy index fell 6.4% in the 12 months ending in March, while the food index rose 8.5% from a year earlier. The energy index fell 0.9% from February to March, driven by a 4% drop in fuel oil prices. Gas prices rose 1% in March, but fell 17.4% from the same month last year.
Food costs rebounded somewhat in March with the food index unchanged, while the housing index fell 0.3%, the BLS noted. Egg prices fell by 10.9% in March.
This is a breaking story. A lot more to come.
Alexandra Canal Senior reporter at Yahoo Finance. Follow her on Twitter @alliecanal8193 and email [email protected]
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