Inflation in the United States pushed up in March as higher costs in food and shelter offset lower energy prices, newly released Consumer Price Index (CPI) data from the US government shows.
Most Americans are now very familiar with conditions common to this year, having to pay much more at grocery stores while enjoying some reprieve in prices at the pump. The latter condition is likely to change with summer approaching.
US consumer prices advanced 0.2% in March following a more modest 0.1% pick-up in February, the Labor Department’s Bureau of Labor Statistics (BLS) said Tuesday, April 15, in its monthly issued CPI report. The CPI measures the change in prices that consumers pay for a select group of goods and services.
"The overall picture is that inflation has stopped falling and is on a gradual uptrend," Bloomberg News quoted Thomas Costerg, an economist at Standard Chartered Plc in New York, who correctly projected the gain in CPI. "To some extent, today’s numbers relieve fears about the U.S. slipping into deflation."
The cost of food was not just higher but a much heavier burden as prices again rose 0.4% to match the previous month. Then, the bureau reported that they had leapt by the biggest amount since September 2011. Also like in February, prices of meats, poultry, fish, and eggs surged 1.2%. Fresh fruits soared 3.1% while dairy and related products climbed 1%, a fifth straight monthly increase. Prices of cereals and bakery products rose 0.2%. Exceptions to gains included fresh vegetables, down 1.6%. On a year-over-year basis, overall food prices advanced 1.7% with the cost of meats, poultry, fish, and eggs increasing the most over that time, up 5.1%.
Energy prices dropped 0.1% in March and are 0.4% higher than a year ago. Within the energy grouping for the month, gas prices fell 1.7% and fuel oil costs declined 2.9% but electricity prices increased 2.6% and the cost of natural gas spiked 7.5% for the biggest one-month gain since October 2005. The largest numbers over the last 12 months belong to natural gas, up 16.4%, and electricity, up 5.3%.
Stripping out the more volatile food and energy categories, so-called core consumer prices also rose 0.2% in March. That compares to the 0.1% pick-up in the prior month. The largest gainers included:
- Shelter and rent, up 0.3%
- Lodging away from home, up 1.5%
- Medical care services, up 0.3%
- Airfares, up 0.5%
- Clothing, up 0.3%
- Used cars and trucks, up 0.4%
On the flip side, medical care commodities fell 0.3% and household furnishing costs declined 0.1%. New vehicle prices were unchanged.
US inflation increased 1.5% over the past 12 months. Annual inflation rates in that time have touched as low as 1% (in October) and reached as high as 1.8% (in June). The prior 12-month inflation rate ended in February climbed 1.1%, snapping a string of firming increases that began in November.
Core US inflation advanced 1.7% in the year-over-year period through March after rising 1.6% in February.
"On a three- and six-month basis, prices are creeping higher, which is something to keep an eye on but with wage growth still modest and lots of retail competition, inflation should remain in check for now," MarketWatch quoted Jennifer Lee, senior economist at BMO Capital Markets, in a research note.
The annual core inflation rate is the benchmark inflation figure monitored by the Federal Open Market Committee (FOMC) as it helps in deciding where to set the key interest rate. The 1.7% increase remains under the Fed’s target inflation rate of 2%.
"Today’s report shows that prices seem well contained, unless, of course, you had to go out and buy food or heat your house," CNNMoney quoted Joel Naroff, president and chief economist at Naroff Economic Advisors.
"Today’s report won’t change the mind of anyone at the Federal Reserve regarding their views on inflation," Naroff added.
Available below is a table of percentage changes for prices of consumer goods and services that are surveyed and analyzed by the Bureau of Labor Statistic of the US Department of Labor. The data periods are from September through March and over the past 12 months.
September 2012 – March 2014 Consumer Prices – Gains & Losses in Percent
|Sept 2013||Oct 2013||Nov 2013||Dec 2013||Jan 2014||Feb 2014||Mar 2014||12 Month|
|Food at home||.0||.0||.0||.0||0.1||0.5||0.5||1.4|
|Food away from home||0.1||0.1||0.3||0.1||0.1||0.3||0.3||2.3|
|Gasoline (all types)||-0.2||-1.6||-0.8||2.6||-1.0||-1.7||-1.7||-4.7|
|Utility (piped) gas service||1.6||-0.5||-1.5||-1.0||3.6||3.6||7.5||16.4|
|All items less food, energy||0.1||0.1||0.2||0.1||0.1||0.1||0.2||1.7|
|Commodities less food, energy||-0.1||-0.1||.0||.0||-0.1||-0.1||.0||-0.3|
|Used cars and trucks||0.3||0.4||0.3||.0||-0.5||-0.1||0.4||0.1|
|Services less energy||0.2||0.2||0.3||0.1||0.2||0.2||0.3||2.3|
Inflation data is published monthly by the BLS and is available about two weeks into a month, released after analyzing the data collected by the end of the reference month. Data for April inflation, in the form of the Consumer Price Index (CPI) and BLS summary report, is scheduled for release on May 15, 2014.
CPI data is used to calculate inflation rates and it is used by this site’s inflation-adjusting calculator. The US Inflation Calculator displays accumulated inflation and the change in buying power of the US dollar between two dates.