Headline Consumer Price Index (CPI) inflation in March was 3.3% higher than a year earlier and up 0.9% from February, according to Labor Department data released Friday. Both readings matched economists\u2019 expectations collected by Bloomberg, which had called for a 3.4% annual increase and a 0.9% monthly gain.<\/p>\n
The rise was \u201calmost entirely\u201d driven by energy, as the US-Israel war against Iran pushed gasoline prices above $4 a gallon and left the vital Strait of Hormuz largely closed. The gasoline index surged 21.2% in March, accounting for nearly three-quarters of the overall monthly CPI gain. The Labor Department reported that this was the single-largest monthly increase in gasoline prices since the series began in 1967.<\/p>\n
Claudia Sahm, chief economist at New Century Advisors, described current conditions as a \u201cwhiplash economy\u201d in comments to Yahoo Finance.<\/p>\n
On a core basis, excluding food and energy, prices rose 0.2% from February and 2.6% from a year earlier, both slightly below economists\u2019 expectations of 0.3% and 2.7%, respectively. The relatively subdued core reading contrasted with the sharp jump in energy-related components.<\/p>\n
Market participants had anticipated strong inflation data. Alexandra Wilson-Elizondo, multiasset solutions global co-head at Goldman Sachs Asset Management, said the market had been \u201cbraced for a hot print,\u201d characterizing the in-line result as a \u201cslight relief.\u201d She added that March\u2019s headline figure \u201cmay be the best headline inflation number we see for a while,\u201d noting that it may only partially reflect the impact of the conflict, which pushed US crude and gasoline up 70% at peak.<\/p>\n
Within other CPI components, airfares increased 2.7% on the month. The overall food index was flat, though individual categories diverged: tomato prices rose 15.3%, while hot dog prices fell 3.6%.<\/p>\n
What was the US headline CPI inflation rate in March?<\/strong> What drove the sharp increase in inflation?<\/strong> How did core inflation perform compared with expectations?<\/strong> How did other price categories move in March?<\/strong>
The headline CPI rose 3.3% year over year and 0.9% month over month in March, the largest monthly gain since 2022.<\/p>\n
The increase was driven primarily by energy costs, especially gasoline, which rose 21.2% and accounted for nearly three-quarters of the monthly gain, amid disruptions linked to the US-Israel war against Iran and the partial closure of the Strait of Hormuz.<\/p>\n
Core CPI, which excludes food and energy, rose 0.2% from February and 2.6% from a year earlier, slightly below economists\u2019 forecasts of 0.3% monthly and 2.7% annual increases.<\/p>\n
Airfares increased 2.7% from February. The overall food index was unchanged, with notable divergences such as a 15.3% rise in tomato prices and a 3.6% decline in hot dog prices.<\/p>\n