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Inflation and Prices

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The Consumer Price Index (CPI) jumped an annualized 4% in March and has risen 5.2% over the first three months of 2003. Outsized increases in energy costs were again responsible for its rapid rise; the energy sector has been an aggravating influence on the accelerating increase (on a year-over-year basis) in the cost of the representative consumer’s market basket. After excluding food and energy, however, the market basket’s cost increases have been mostly flat this year and have shown only a modest 1.7% increase from last year, a sign that there has been little underlying inflationary pressure outside the energy sector. Indeed, the median CPI, an alternative measure of the general rise in consumer prices, has been moderating over the past 18 months, and its current 12-month reading of 2.6% is the lowest since mid-2000.

Suggested citation: "Inflation and Prices," Federal Reserve Bank of Cleveland, Economic Trends, no. 03-05, pp. 02-03, 05.01.2003.

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