Inflation Up 2.3% from Last Year, Consumer Prices Rise 0.1% in March

Inflation remained tame in March, as U.S. consumer prices edged only slightly higher due mostly to higher fresh fruits and vegetables costs, the Labor Department reported Wednesday.

The Consumer Price Index, the government’s most closely watched reading for inflation at the consumer level, rose 0.1% in March. February’s CPI was flat and marked the first time prices had not advanced since March 2009.

"Inflation as a concern is relegated to the distant future," Guy Lebas, chief fixed income strategist at Janney Montgomery Scott LLC in Philadelphia, said on Bloomberg. "It gives the Fed the flexibility to keep rates low for a while."

Helping to keep prices contained in March were flat energy prices, as increased electricity costs were offset by lower gasoline and natural gas bills. For the past year, however, energy prices have soared 18.3%, with gasoline leading at 41.1%.

Those costs drove inflation up 2.3% over the past 12 months compared to a 2.1% increase the Labor Department reported during the 12 months ending in February.

Core consumer prices, which strip out volatile food and energy prices, were unchanged during the month of March. While core inflation was still up 1.1% from a year earlier, it was the smallest gain since 2004. Month prior respective increases were 0.1% and 1.3%.

"The rate of inflation was very low this month and still somewhat below the historical average," Andres Carbacho-Burgos, an economist for Moody’s Economy.com, was cited on CNNMoney.com. Adding that the annual rate has historically been between 2.4% to 2.5% and core inflation rate between 1.7% to 1.8%.

The 12-month core inflation rate is right within the Federal Reserve’s comfort range of 1%-2%.

March Consumer Price Details

Rising prices include:

  • Prices for fruits and vegetables soared 3.4% after decreasing 0.1% in February. (Fresh fruits and vegetables jumped 4.6%.)
  • Fuel oil prices rose 0.7% following a 2.4% decrease in February. They are up 27.2% on the year.
  • The index for electricity jumped 2.1% after declining 0.5% in the prior month.
  • New vehicles prices rose 0.1% for the second straight month. They are 3.0% higher on the year.
  • Used car and truck prices climbed 0.5% after a 0.7% increase. They are up 16.3% over the past
    year.
  • Food prices moved up 0.2% following a 0.1% increase. They have climbed 0.2% over the past 12 months.
  • Medical care expenses rose 0.3% in March after rising 0.5% in February.

Declining prices include:

  • Gasoline prices dropped 0.8% after retreating 1.4% in February and surging 4.4% in January. They have soared 41.4% compared to a year ago.
  • Natural gas costs were down 0.7% after rising 3.9% in February and increasing 3.5% in January.
  • Clothing prices fell 0.4%. The were down 0.7% in February.
  • Shelter costs, which account for about 1/3 of the CPI, were retreated 0.1% in March. They were flat in February and are down 0.6% over the past year.

Energy prices were flat in March, after declining 0.5% in February and jumping 2.8% in January, which was the ninth consecutive increase. Energy is up 18.3% in the past 12 months. Additionally, dairy and related products prices remained unchanged in March as well.

To compare how the buying power of the U.S. dollar has changed over time, check out the updated Inflation Calculator.

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