US Inflation Eases as Consumer Prices Retreat in March 2013

US inflation over the past 12 months eased as consumer prices in March retreated for the first time in four months, government data released Tuesday shows.

Cheaper gasoline and clothing brought some relief to American consumers, keeping inflation mostly in check. Prices at the pump dropped 4.4% last month compared to the 9.1% increase in the prior month. Clothing costs declined 1.0%, the biggest decline since April 2001.

Overall, US consumer prices fell 0.2% in March after jumping 0.7% in February for the largest increase since mid-2009.

Then, regular unleaded gasoline peaked to $3.79 a gallon, according to AAA. The association reported prices dropped to an average of $3.64 in March. The declining trend continues with the national average falling for 12 straight days to $3.53 on Monday.

"Anyone who has filled their car with gasoline knows that energy prices have fallen over the last month, which was the single largest factor in keeping price increases contained," CNN Money quoted Steve Cunningham, director of education and research at the American Institute for Economic Research.

Also easing inflation’s bite, food prices flattened after edging 0.1% higher in February.

Excluding volatile food and energy costs, the so-called core US Inflation rate in March was 0.1% as compared to the 0.2% increase in February. Rising items tracked by the Bureau of Labor Statistics in its monthly Consumer Price Index (CPI) report included:

  • 1.2% jump in used cars and trucks
  • 0.6% rise in airline fares
  • 0.3% advance in medical care
  • 0.2% pick-up in shelter
  • 0.1% increase in new vehicles

In addition to the drop in clothing prices noted earlier, cheaper items last month included furniture by 0.3%, tobacco by 0.2% and recreation by 0.1%.

US inflation rose 1.5% over the past 12 months compared to the 2.0% increase in the 12 months ending January. The increase was the smallest since the 12 months ending July 2012. (See inflation rates since 2003.)

"On balance, this reflects the soft demand environment out there. There is not a lot of price pressure. That’s good for the Fed to maintain its accommodative policy," Reuters quoted Sam Bullard, a senior economist at Wells Fargo in Charlotte, North Carolina.

Core US inflation gained 1.9% year-over-year through March. The core 12-month inflation reading was reported at 2.0% in the February and 1.9% in the previous three months before then. This core US inflation rate is closely watched by the Federal Reserve as it helps decide where the central bank sets its key interest rate. The level is a touch below the Fed’s 2% inflation target.

US inflation data from September through March and over the past 12 months follows.

September 2012 – March 2013 Consumer Prices – Gains in Percent

  Sept 2012 Oct 2012 Nov 2012 Dec 2012 Jan 2013 Feb 2013 Mar 2013 12
Month
All items 0.5 0.2 -0.2 .0 .0 0.7 -0.2 1.5
  Food 0.1 0.2 0.2 0.2 .0 0.1 .0 1.5
    Food at home -0.1 0.3 0.3 0.2 .0 0.1 -0.1 1.0
    Food away from home 0.2 0.1 0.1 0.1 0.1 0.1 0.2 2.3
  Energy 3.9 0.1 -3.4 -0.8 -1.7 5.4 -2.6 -1.6
    Energy commodities 6.1 0.1 -5.7 -1.5 -3.0 8.6 -4.1 -3.1
      Gasoline (all types) 6.3 -0.1 -6.0 -1.9 -3.0 9.1 -4.4 -3.1
      Fuel oil 4.1 1.1 -0.2 .0 -0.2 3.1 -2.1 -2.4
    Energy services 0.4 .2 0.6 0.3 0.4 0.5 -0.2 1.1
      Electricity 0.1 0.3 0.4 0.2 1.1 0.3 -0.6 0.9
      Utility (piped) gas service 1.2 -0.2 1.5 0.7 -1.7 1.2 1.0 1.8
  All items less food, energy 0.2 0.2 0.1 0.1 0.3 0.2 0.1 1.9
    Comm. less food, energy -0.1 .0 -0.1 -0.1 0.2 .0 -0.1 .0
      New vehicles .0 0.1 0.3 0.2 0.1 -0.3 0.1 1.1
      Used cars and trucks -1.4 -0.7 -0.4 -0.3 0.2 0.8 1.2 0.1
      Apparel 0.5 0.6 -0.5 0.1 0.8 -0.1 -1.0 0.8
      Medical care -0.1 0.1 -0.3 -0.3 0.1 -0.4 0.1 0.6
    Services less energy 0.2 0.2 0.2 0.2 0.3 0.2 0.2 2.5
      Shelter 0.2 0.2 0.2 0.1 0.2 0.2 0.2 2.2
      Transportation 0.5 0.6 0.2 0.4 0.5 0.1 0.2 3.1
      Medical care 0.3 0.1 0.3 0.3 0.2 0.3 0.3 3.9

 

The US Bureau of Labor Statistics (BLS) has a scheduled release date of May 16, 2013 at 8:30 AM ET for the next round of Consumer Price Index data. This inflation information will offer consumer prices during the month of April 2013. The CPI is the core data used in this site’s Inflation Calculator.

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