Keeping you up to date on the latest data releases.
The headline CPI jumped up at an annualized rate of 6.8 percent in March, matching its increase in February. As has been the case recently, food and energy prices accounted for a large portion of the overall increase in March (the release noted that nearly three-fourths of the overall increase was due to food and energy price increases). Food price gains have accelerated in recent months, increasing 7.5 percent over the past three months (January through March), compared with an increase of 1.6 percent over the three months prior (Octover through December). Energy prices, driven largely by gasoline price increases, have also accelerated in recent months. Excluding food and energy prices, the index rose a much more modest 1.6 percent in March, compared to a 2.4 percent rise in February. The core CPI has risen 2.0 percent over the last three months and is up 1.2 percent over the past year. Our measures of underlying inflation—the median CPI and 16 percent trimmed-mean CPI—rose 1.6 percent and 3.0 percent, respectively. Over the past two months, these two measures have disagreed markedly, with the average increase in the trim 1.4 percentage points above the median. This has pushed up the near-term (3 month) growth rate in the trim up to 3.2 percent, while the median is only 2.0 percent over the same period. It appears that the right tail of the distribution has grown fat recently, and the 16 percent trimmed-mean CPI is picking up on that skewness. Roughly 14 percent of the overall index rose at rates above 10 percent in March, and the only item in that bunch not directly related to food and energy price increases was car and truck rental (which appears to be noise; spiking up after two relatively large monthly declines).