U.S. consumer prices cooled again in March, posting their first monthly decline in nearly five years, according to a government report released Thursday, April 10. The drop was steeper than expected, driven largely by falling gasoline prices. On an annual basis, core inflation pressures eased to their lowest level in four years.
Month to month, while energy prices fell and used vehicle costs declined, several other categories – especially food – saw price increases.
"The food at home index rose 0.5 percent over the month as four of the six major grocery store food group indexes increased. Driven primarily by a 5.9-percent increase in the index for eggs, the index for meats, poultry, fish, and eggs rose 1.3 percent in March. The beef index also increased over the month, rising 1.2 percent," the inflation report noted.
The headline monthly inflation figure showed a 0.1% decrease in U.S. consumer prices for March – the lowest since a similar drop in May 2020 – following a 0.2% rise in February, according to the Labor Department’s April 10 Consumer Price Index (CPI) report. The widely reported consensus had projected a 0.1% monthly increase.
The Consumer Price Index (CPI), a key inflation gauge, measures what American consumers pay for a wide range of everyday goods and services, from eggs to energy.
Food prices overall rose 0.4% in March, accelerating from February’s 0.2% gain. Grocery store prices jumped 0.5% after staying flat the previous month, while restaurant prices increased 0.4% for a second straight month.
Over the past year, food prices rose 3%, up from 2.6% in February. Grocery prices were up 2.4%, compared to 1.9% previously, and dining-out costs rose 3.8%, edging higher from 3.7%.
In other sectors, gasoline prices sank 6.3% in March following a 1% decline in February. Annually, gas prices were down 9.8%, deepening from the previous month’s 3.1% annual drop.
The broader energy index, which includes gasoline, electricity, and fuel oil, fell 2.4% in March after a slight 0.2% uptick in February. On a year-over-year basis, energy prices dropped 3.3%, accelerating from February’s 0.2% decrease.
Excluding volatile food and energy components, the rate of core consumer prices rose 0.1% in March, down from the previous 0.2% increase and landing two tenths of a percentage point below expectations.
Shelter costs rose 0.2% in March, down from February’s 0.3% increase, but marked the 59th consecutive monthly gain. Over the past year, shelter prices climbed 4%, easing slightly from February’s 4.2% rise.
Other recent 12-month comparisons show gains of 4.4% in January, 4.6% in December, 4.7% in November, 4.9% in both October and September, 5.2% in August, 5.1% in July, 5.2% in June, 5.4% in May, 5.5% in April, 5.7% in both March and February, 6% in January, 6.2% in December 2023, 6.5% in November 2023, 6.7% in October 2023, 7.2% in September 2023, 7.3% in August 2023, 7.7% in July 2023, 7.8% in June 2023, 8% in May 2023, 8.1% in April 2023, and 8.2% in March 2023, the latter being the most significant annual increase since June 1982.
The shelter component of the CPI includes prices for items such as apartment rents, owners’ equivalent rent – a measure of what homeowners would pay to rent or earn from renting their property – lodging away from home like hotels and motels, and housing at schools.
In other key pricing categories:
- Clothing prices rose 0.4% in March, down from the 0.6% increase in February, and were 0.3% higher than a year earlier.
- New vehicle prices edged up 0.1% for the month after edging 0.1% lower in Feburary, while year-over-year they were flat.
- Used car and truck prices declined 0.7% in March, reversing from February’s 0.9% gain, and were up 0.6% from the previous year.
- Airline fares fell 5.3% in March after a 4% fall in February, dropping 5.2% over the past year.
For the headline annual rate, inflation climbed 2.4% over the 12 months ending in March – the lowest since a similar gain in September 2024. That is down from 2.8% in February and two-tenths of a percentage point below forecasts. The last time the rate was lower than 2.4% was in February 2021, when it registered at 1.7%.
For a broader perspective and a look further back, the inflation rate peaked at 9.1% during the 12-month period ending in June 2022. This was the fastest rate of inflation since November 1981. Additionally, until March 2023, inflation rates had remained at or above 6% for 17 consecutive months.
Meanwhile, core inflation rose 2.8% over the year through March — the lowest since March 2021. It also came in two-tenths below expectations and eased from February’s 3.1% increase. This core, "all items less food and energy" index, is one of the benchmark inflation rates monitored by the Federal Open Market Committee (FOMC) to guide the central bank in setting its key interest rate.
In September 2022, the annual core inflation rate at 6.6% was the highest since August 1982. Many economists consider the core reading as a better predictor for future inflation.
The following table of key inflation figures is for the last seven months through March, as published by the U.S. Labor Department’s Bureau of Labor Statistics (www.bls.gov/cpi) on April 10, 2025. To index the data each month, the BLS monitors the prices of about 80,000 consumer goods and services from around the nation. All monthly and annual pricing changes are in percentages.
September 2024 to March 2025 Consumer Prices – Gains & Losses in Percent
(Seasonally Adjusted from Prior Month and Unadjusted 12-Month)
| Sept 2024 | Oct 2024 | Nov 2024 | Dec 2024 | Jan 2025 | Feb 2025 | Mar 2025 | 12 Month | |
| All items | 0.2 | 0.2 | 0.3 | 0.4 | 0.5 | 0.2 | -0.1 | 2.4 |
| Food | 0.3 | 0.2 | 0.3 | 0.3 | 0.4 | 0.2 | 0.4 | 3.0 |
| Food at home | 0.3 | 0.2 | 0.4 | 0.3 | 0.5 | 0.0 | 0.5 | 2.4 |
| Food away from home | 0.3 | 0.2 | 0.3 | 0.3 | 0.2 | 0.4 | 0.4 | 3.8 |
| Energy | -1.0 | -0.2 | 0.1 | 2.4 | 1.1 | 0.2 | -2.4 | -3.3 |
| Energy commodities | -2.3 | -1.1 | 0.2 | 3.9 | 1.9 | -0.9 | -6.1 | -9.5 |
| Gasoline (all types) | -2.3 | -1.0 | 0.3 | 4.0 | 1.8 | -1.0 | -6.3 | -9.8 |
| Fuel oil | -3.8 | -2.3 | -1.4 | 2.1 | 6.2 | 0.8 | -4.2 | -7.6 |
| Energy services | 0.6 | 0.7 | -0.1 | 0.8 | 0.3 | 1.4 | 1.6 | 4.2 |
| Electricity | 0.5 | 0.8 | -0.2 | 0.2 | 0.0 | 1.0 | 0.9 | 2.8 |
| Utility (piped) gas service | 0.7 | 0.5 | 0.5 | 2.8 | 1.8 | 2.5 | 3.6 | 9.4 |
| All items less food, energy | 0.3 | 0.3 | 0.3 | 0.2 | 0.4 | 0.2 | 0.1 | 2.8 |
| Commodities less food, energy | 0.2 | 0.0 | 0.2 | 0.0 | 0.3 | 0.2 | -0.1 | -0.1 |
| New vehicles | 0.1 | 0.0 | 0.5 | 0.4 | 0.0 | -0.1 | 0.1 | 0.0 |
| Used cars and trucks | 0.5 | 1.2 | 1.3 | 0.8 | 2.2 | 0.9 | -0.7 | 0.6 |
| Apparel | 1.0 | -0.9 | 0.1 | 0.1 | -1.4 | 0.6 | 0.4 | 0.3 |
| Medical care | -0.7 | -0.2 | -0.1 | 0.0 | 1.2 | 0.1 | -1.1 | 1.0 |
| Services less energy | 0.4 | 0.3 | 0.3 | 0.3 | 0.5 | 0.3 | 0.1 | 3.7 |
| Shelter | 0.3 | 0.4 | 0.3 | 0.3 | 0.4 | 0.3 | 0.2 | 4.0 |
| Transportation | 1.2 | 0.4 | 0.1 | 0.5 | 1.8 | -0.8 | -1.4 | 3.1 |
| Medical care | 0.6 | 0.3 | 0.3 | 0.2 | 0.0 | 0.3 | 0.5 | 3.0 |
The BLS releases inflation data around the middle of the month, covering consumer prices surveyed up to the previous month. The Consumer Price Index (CPI) for April and the latest annual period will be made public on May 13, 2025.
The CPI data is also used to calculate inflation rates and power this site’s U.S. Inflation Calculator, which displays the cumulative inflation and the change in the buying power of the U.S. dollar over time.
