Gasoline and shelter costs the latest drivers of the CPI increase.
The U.S. annual inflation rate came in hotter than expected for the fourth consecutive month in March, suggesting that the last mile in the inflation fight could be a slow and bumpy road for the Federal Reserve.
According to the Bureau of Labor Statistics (BLS), the consumer price index (CPI) rose to 3.5 percent last month, up from 3.2 percent in February. This was also higher than the consensus estimate of 3.4 percent.
Inflation climbed by 0.4 percent monthly and topped market expectations of 0.3 percent.
The core CPI, which removes the volatile energy and food components, was unchanged at 3.8 percent but came in slightly higher than the projection of 3.7 percent. Core inflation also jumped 0.4 percent.
The three-month annualized change in the core CPI advanced to 4.5 percent. The six-month annualized adjustment in the core CPI swelled to 3.9 percent, the highest reading since July 2023.
Gasoline and shelter prices were the most significant contributors to the inflation increase.
The energy index rose by 1.1 percent monthly, including a 1.7 percent advance in gasoline. Energy services also swelled 0.7 percent, with electricity costs surging 0.9 percent.
Energy prices have contributed to the upward inflation pressures. Year-to-date, crude oil and gasoline prices have rocketed by about 20 percent and 16 percent, respectively. The rally in global energy markets has been mainly fueled by geopolitical tensions and tighter international supplies, which has resulted in a knock-on effect for various aspects of the worldwide marketplace.
Shelter continued to trend higher, rising by 0.4 percent monthly, and came in 5.7 percent year-over-year.
For the past 18 months, economists and the monetary authorities predicted shelter inflation would ease by now. It has instead remained sticky and stubborn.
Food inflation was little changed last month, edging up by 0.1 percent monthly. Compared with the same time a year ago, the food index is up 2.2 percent.
While food inflation has stagnated, the cumulative effects have been seen throughout the industry as a wide array of goods have risen in price.
By Andrew Moran
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