Morningstar

March CPI Report Shows Impact of Surging Energy Prices with Inflation at 3.3%

Core CPI at a 2.6% annual rate.

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The Bureau of Labor Statistics reported that the Consumer Price Index increased 3.3% in March from year-ago levels after rising 2.4% in February. Year-over-year core CPI (which excludes volatile food and energy costs) rose 2.6%, outpacing the February rate of 2.5%.

Overall inflation rose 0.9% month over month after rising 0.3% in February. Core inflation rose 0.2%, matching the February increase.

Economists had expected CPI to rise 0.9% month over month and 3.7% year over year in March, according to consensus estimates from FactSet. Core CPI was expected to be up 0.3% month over month and 2.7% year over year.

March CPI Inflation Report Highlights

  • CPI rose 0.9% for the month after rising 0.3% in February.
  • Core CPI rose 0.2% after rising by the same amount in February.
  • CPI increased 3.3% year over year after increasing 2.4% the prior month.
  • Core CPI rose 2.6% from year-ago levels after rising 2.5% in February.

Food prices held steady in March after increasing 0.4% in February. Grocery prices fell 0.2%, while restaurant prices increased 0.2%. Overall energy prices increased 10.9% after rising 0.6% last month. While utility gas prices fell 0.9%, fuel oil prices increased 30.7%, gasoline prices rose 21.2%, and electricity prices increased 0.8%. Shelter prices rose 0.3% in March after rising 0.2% in February.

What Is the CPI?

The Consumer Price Index is a mainstream measure of inflation that tracks changes in consumer prices for a wide variety of goods and services, including food, housing, healthcare, and energy.

Investors widely follow the CPI report, but it isn’t the only way to track inflation. The Federal Reserve generally focuses on the Personal Consumption Expenditures Price Index when making interest rate decisions. The Fed targets a 2% inflation rate based on the PCE inflation index, not the CPI. However, the CPI generally makes front-page news because it is released earlier than the PCE and contains much of the same information. Both reports are released monthly.

This article was generated with the help of automation and reviewed by Morningstar editors. Learn more about Morningstar’s use of automation.

The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.

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