U.S. Consumer Price Index Slips in March; Core Prices Edge Higher

The Consumer Price Index edged 0.1% lower in March after rising 0.2% in February and 0.5% in January. A 0.1% rise had been expected in the Action Economics Forecast Survey. The y/y increase in the headline CPI fell to 2.4% from 2.8% in February. It was the weakest y/y gain in six months and was below the 9.1% peak in June 2022. The CPI excluding food & energy rose 0.1% following increases of 0.2% in February and 0.4% in January. A 0.3% rise had been expected. The 2.8% y/y gain is the weakest in core prices in four years and below the 6.6% peak in September 2022.

Energy prices declined 2.4% (-3.3% y/y) last month after a 0.2% February rise. Gasoline prices declined 6.3% (-9.8% y/y) after falling 1.0%. Fuel oil prices weakened 4.2% (-7.6% y/y) after rising 0.8% in February. Natural gas prices jumped 3.6% (9.4% y/y) following a 2.5% gain, and electricity prices gained 0.9% (2.8% y/y) after rising 1.0% in February.

Food prices rose 0.4% (3.0% y/y) in March after a 0.2% February increase as egg prices strengthened 5.9% (60.4% y/y) following a 10.4% gain. Meat, poultry & fish prices rose 0.6% (3.1% y/y), after a 0.5% rise, while dairy product prices rebounded 1.0% (2.2% y/y) and reversed February’s 1.0% decline. Cereal & bakery product costs eased 0.1% (+1.1% y/y) after February’s 0.4% rise while fruit & vegetable prices dropped 0.5% (-0.7% y/y), the same as in both of the prior two months. Nonalcoholic beverage prices rose 0.6% (2.4% y/y) in March after falling 0.5% in February.

Goods prices less food and energy eased 0.1% both m/m and y/y in March after rising 0.2% in February. Prices of used cars and trucks fell 0.7% (+0.6% y/y) last month after rising 0.9% in February while new vehicle costs improved 0.1% (0.0% y/y) after slipping 0.1% in February. Apparel prices increased 0.4% (0.3% y/y) following a 0.6% gain while appliance prices eased 0.1% (-2.5% y/y) following a 0.5% increase. Home furnishings prices held steady (-0.3% y/y) after rising 0.2% in February. Recreation product costs fell 0.3% (-2.3% y/y) in March after falling 0.7%. Education & communication product costs rose 0.5% last month (-5.7% y/y) after falling 0.2% in February.

Services prices less energy improved 0.1% (3.7% y/y) last month following a 0.3% March gain. Shelter prices rose 0.2% (4.0% y/y) last month after a 0.3% rise as owners equivalent rent of primary residences increased 0.4% (4.4% y/y) after four consecutive 0.3% increases. The cost of lodging away from home fell 3.5% (-2.5% y/y) after improving 0.2% in February. Rents of primary residences gained 0.3% (4.0% y/y) for the fourth consecutive month. Transportation service prices fell 1.4% (+3.1% y/y) after falling 0.8% in February reflecting a 0.8% decline (+7.5% y/y) in the cost of motor vehicle insurance. Public transportation costs declined 4.2% (-3.5% y/y) after falling 3.4% in February. Prices of medical services increased 0.5% (3.0% y/y) after rising 0.3% and the cost of recreation services edged 0.1% higher (4.3% y/y) after increasing 0.8 in February.

The Consumer Price figures can be found in Haver's USECON database. The expectations figure is contained in the AS1REPNA database.