| The Consumer Price Index, the broadest measure of consumer prices, increased 5% from a year earlier, down from 6% in February and a 40-year high of 9.1% last June.
Why it matters: The overall fall of the topline inflation number will get attention. It is a positive step but stripping out volatile components like food and energy shows “core prices” are still rising rapidly (5.5% annually).
Details:
- Inflation rose 0.1% from February to March, a sharp decline from January and February.
- Housing was by far the largest contributor to the monthly increase.
- It more than offset declines in energy, which decreased 3.5% over the month.
- Food at home prices fell 0.3% during March.
- Core prices (all items less food and energy) rose 0.4%.
- On an annual basis, prices of necessities like electricity (10.2%), food at home (8.4%), and housing (8.2%) rose, while gas (-17%) declined.
Be smart: The inflation data will tell the Fed that higher interest rates are working, but that they still need to raise them more to get inflation back down to its 2% target. Look for another rate increase in May. |
