Inflation accelerates more than expected in March as high prices persist
A person shops for groceries at Lincoln Market on March 10, 2022 in the Prospect Lefferts Garden neighborhood of Brooklyn borough in New York City. (Photo by Michael M. Santiago/Getty Images)
Inflation accelerated in March for the third straight month, keeping prices painfully high for millions of Americans and likely delaying any interest rate cuts by the Federal Reserve.
The Labor Department said Wednesday that the consumer price index, a broad measure of the price of everyday goods including gasoline, groceries and rent, rose 0.4% in March from the previous month. Prices climbed 3.5% from the same time last year, above the 3.2% figure recorded in February.
Both of those figures came in higher than the 0.3% monthly increase and 3.2% headline gain forecast by LSEG economists.
Other parts of the report also pointed to stubborn price pressures within the economy. Core prices, which exclude the more volatile measurements of food and energy, climbed 0.4%, as it did in January and February, for an annual gain of 3.8%. Those figures are also higher than estimates.
Altogether, the report indicates that while inflation has fallen considerably from a peak of 9.1%, it remains well above the Federal Reserve's 2% target.
"This marks the third consecutive strong reading and means that the stalled disinflationary narrative can no longer be called a blip," said Seema Shah, chief global strategist at Principal Asset Management.
High inflation has created severe financial pressures for most U.S. households, which are forced to pay more for everyday necessities like food and rent. The burden is disproportionately borne by low-income Americans, whose already-stretched paychecks are heavily affected by price fluctuations.
Housing and gasoline costs were the biggest drivers of inflation last month, accounting for more than half of the total monthly increase.
Rent costs rose 0.5% for the month and are up 5.7% from the same time last year. Rising rents are concerning because higher housing costs most directly and acutely affect household budgets. Gasoline prices, meanwhile, jumped 1.7% over the course of March. They are up 1.3% when compared with the same time last year.
Other price gains also proved persistent in March.
Food prices, a visceral reminder of inflation for many Americans, ticked up 0.1% over the course of the month. In total, the cost of groceries is up 1.2% from the same time last year and up a stunning 21% when compared with January 2021, shortly before the inflation crisis began.