American consumers are paying more driving to the grocery store but they’re having to spend less once they get there.
In March, food prices retreated for the first time in nearly two years. Still, hikes in areas like gasoline and shelter more than offset those declines.
Consumer prices rose 0.2% in March, matching their increase in February, the US Labor Department reported Friday, April 17, in its monthly report on the Consumer Price Index (CPI). The CPI measures what Americans pay for everything from milk and cereal to cars.
Gasoline prices jumped 3.9% for their largest increase since February 2013, and the broader price category for energy increased 1.1%. Yet, from a year ago, prices at the pump and overall energy costs are down by 29.2% and 18.3%.
Food prices fell 0.2% in March, marking their first decline since May 2013. Compared to a year earlier, however, they are 2.3% higher.
Excluding energy and food, core consumer prices also advanced 0.2% in March, which matches their February and January gains. A gain toward the 0.1% level was expected.
"After the spate of weak US economic reports this week, the stronger than expected showing in core inflation should ease one of the key concerns that has tied the Fed’s hands on policy tightening," TD Securities analyst Millan Mulraine said in a note to clients.
Within this major category, increases were broad-based with:
- shelter up 0.3%,
- new vehicles up 0.2%,
- used cars and truck prices up 1.2%,
- clothing up 0.5%,
- medical care commodities up 0.1%,
- medical care services up 0.4%, and
- tobacco up 0.4%.
In the longer period, inflation dipped 0.1% in the past 12 months through March after an unchanged reading in February. This latest decline matches January, which was the first reported drop in annual inflation rates since October 2009.
In rounding out the Labor Department’s report, core inflation advanced 1.8% on a year-over-year basis after gaining 1.7% in the 12 months ending February and 1.6% through January. The annual level is the benchmark US inflation rate monitored by the Federal Open Market Committee (FOMC) as it helps the central bank decide where to set the key interest rate. The rate continues to sit under the Fed’s 2% annual inflation target.
"The FOMC has said that it does not need inflation to be at 2% to raise the fed funds rate, but committee members would like inflation to be at least moving toward the target," said Stuart Hoffman, chief economist at PNC Financial Services
Inflation data listed in the table below offers recent monthly and annual percentage changes for prices of consumer goods and services that were surveyed, analyzed and then summarized by the Labor Department’s Bureau of Labor Statistics (www.bls.gov/cpi).
September 2014 – March 2015 Consumer Prices – Gains & Losses in Percent
|Sept 2014||Oct 2014||Nov 2014||Dec 2014||Jan 2015||Feb 2015||Mar 2015||12 Month|
|Food at home||0.3||0.2||0.1||0.2||-0.2||0.1||-0.5||1.9|
|Food away from home||0.3||0.2||0.4||0.3||0.2||0.3||0.2||2.9|
|Gasoline (all types)||-0.9||-2.0||-7.2||-9.2||-18.7||2.4||3.9||-29.2|
|Utility (piped) gas service||0.4||-1.9||-1.3||1.4||-3.4||-2.0||-2.7||-14.4|
|All items less food, energy||0.1||0.2||0.1||0.1||0.2||0.2||0.2||1.8|
|Commodities less food, energy||0.1||.0||-0.3||-0.2||-0.1||0.2||0.3||-0.2|
|Used cars and trucks||.0||-0.6||-0.9||-0.8||-0.1||1.0||1.2||-1.3|
|Services less energy||0.2||0.2||0.2||0.2||0.3||0.1||0.2||2.4|
Bureau of Labor Statistic data for inflation in the United States is published monthly. The information looks at consumer prices through to the previous month. Consumer Price Index data with April inflation and through the annual period becomes public on May 22, 2015.
CPI data is used to calculate inflation rates and it is the backbone for this site’s inflation-adjusted calculator. The US Inflation Calculator provides accumulated inflation and the change in buying power of the US dollar over time.