Keeping you up to date on the latest data releases.
The headline CPI rose at an annualized rate of 3.5 percent in March, and while gasoline prices were a contributing factor (up 23 percent, accounting for a little more than one-third of the overall increase), the report appears consistent with some broad-based price pressure. Energy prices as a whole rose by 11.6 percent in March, as the jump in gas prices was partially offset by a continued decline in the price index for household energy services, which fell 4.9 percent during the month (−1.8 percent on a year-over-year basis). There is some speculation in the media that this offset may provide some relief for consumers, helping to prop up spending that otherwise would have been hamstrung by higher gas prices. Food prices rose 1.9 percent in March, and are up just 1.5 percent over the last 3 months, much lower than its 12-month growth rate of 3.3 percent. On a year-over-year basis the headline CPI is up 2.7 percent, and has been slowing from a recent high of 3.9 percent last September. However, in contrast, the growth rates in underlying inflation have been rising, perhaps to meet in the middle. Excluding food and energy prices, the (“core”) index rose 2.8 percent in March, following a much softer 1.2 percent increase in February. Over the past 3 months, the core CPI is up 2.2 percent, in line with its 12-month growth rate of 2.3 percent (which, if the usual gap holds, puts core PCE inflation very near its explicit target). The longer-run (12-month) growth rate in the core CPI has risen somewhat swiftly: roughly 1.0 percentage point over the past year. Our preferred measures of underlying inflation—the median CPI and 16 percent trimmed-mean CPI—rose 2.2 percent and 2.7 percent, respectively in March, and are both up 2.4 percent over the past 12 months.