The cost of living in the United States increased in March for the first time in four months, according to a government report released on Thursday, April 14. At the same time, underlying inflation rose less than forecast after rising more than expected in February.
Consumers spent less at grocery and clothing stores but more for healthcare, transportation and shelter. In addition and for the first time since November, drivers paid more to fill up their tanks.
In the headline figure for March, consumer prices rose 0.1% after declining 0.2% in February, the US Labor Department said in its monthly report on the Consumer Price Index. The CPI measures what American consumers pay for everything from cars to tobacco.
Prices at the pump climbed 2.2% in March — the most since June, after diving 13% in February and falling 4.8% in both December and January. Gas prices are expected to continue their advance in the coming weeks.
"The switchover to summer-blend gasoline at refineries has already taken place, and this special blend of fuel has begun to make its way to fuel terminals in many parts of the country, though it can take a few weeks because fuel travels through pipelines at four miles per hour," said AAA. "This blend costs more to produce, and drivers likely will notice higher prices in areas required to use this fuel, such as in the Northeast, over the next few weeks."
AAA also noted that Americans paid the cheapest quarterly gas prices in twelve years during the first three months of 2016. Gasoline prices dropped 20.9% over the past 12 months.
The broader index for energy, which combines items like gasoline, electricity and fuel oil, rose 0.9% in March — also the most since June, after tumbling by 6% in February and 2.8% in each of the prior two months. Energy prices are 12.6% lower than a year earlier.
Food prices retreated 0.2% last month after rising 0.2% in February, when they marked their first increase since October. They are 0.8% higher over the past 12 months.
Excluding volatile food and energy, so-called core consumer prices rose 0.1% in March for the smallest increase since August. Many economists were expecting an increase of 0.2% for the month, according to media reports.
Major component indexes were mixed in March," the Labor Department said. "The indexes for shelter, recreation, medical care, education, tobacco, and personal care were among those that rose, while the indexes for apparel, airline fares, communication, household furnishings and operations, and used cars and trucks all declined."
In February, core consumer prices rose 0.3% and matched January’s level, which went down as the biggest increase since August 2011. The last back-to-back 0.3% gains happened in early 2001.
The cost of owning a home or renting an apartment rose 0.2% in March, and is 3.2% higher than a year earlier. Medical care prices picked up slightly in March, increasing 0.1% after rising 0.5% in both January and February. They are 3.6% higher than a year ago. The cost of buying new cloths fell 1.1%, the biggest drop since September 1998 and the first decline in three months — though prices are 0.6% lower over of the past 12 months.
US inflation rose 0.9% in the past year after rising 1% previously. As recently as January, the annual inflation rate at 1.4% was the highest since October 2014. February’s 1% increase is the second quickest since that time.
In rounding out the Labor Department’s report, core US inflation advanced 2.2% on an annual basis, after rising 2.3% in the 12 months ended February. The core annual reading is one of the benchmark inflation rates monitored by the Federal Open Market Committee (FOMC) as it helps the central bank decide where to set the key interest rate.
"The weaker dollar has slowed the drop in goods prices, the tight market is boosting rents, and upward pressure on wages is lifting other services components," MarketWatch quoted Ian Shepherdson, chief economist of Pantheon Macroeconomics.
Below is inflation data for the last few months and through March 2016, as published by the US Labor Department’s Bureau of Labor Statistics (www.bls.gov/cpi). The government agency monitors prices of consumer goods and services around the nation, analyzes them, and then summarizes the results in monthly reports. The following table offers monthly and annual pricing changes in percentages.
September 2015 – March 2016 Consumer Prices – Gains & Losses in Percent
|Sept 2015||Oct 2015||Nov 2015||Dec 2015||Jan 2016||Feb 2016||Mar 2016||12 Month|
|Food at home||0.2||.0||-0.3||-0.4||-0.2||0.2||-0.5||-0.5|
|Food away from home||0.5||0.2||0.2||0.1||0.3||0.1||0.2||2.7|
|Gasoline (all types)||-7.1||0.9||0.8||-4.8||-4.8||-13.0||2.2||-20.9|
|Utility (piped) gas service||-0.9||-0.9||-1.7||-1.9||-0.6||1.0||-0.7||-9.2|
|All items less food, energy||0.2||0.2||0.2||0.2||0.3||0.3||0.1||2.2|
|Commodities less food, energy||.0||-0.1||-0.1||-0.1||0.2||0.3||-0.2||-0.4|
|Used cars and trucks||-0.2||-0.1||0.1||0.2||0.1||0.2||-0.1||-0.6|
|Services less energy||0.3||0.3||0.3||0.2||0.3||0.3||0.2||3.0|
The BLS generally publishes new US inflation data around mid-month, and it presents the change in consumer prices from the previous month. The Consumer Price Index for April and the latest 12-month or annual period will be available on May 17, 2016.
CPI figures are used in calculating inflation rates. They are the backbone for this site’s calculator for inflation. The US Inflation Calculator provides accumulated inflation and shows the change in buying power of the American dollar over time.