U.S. Consumer Prices Inch Up 0.1% In March, Annual Growth Slows To 5.0%

(RTTNews) - A highly anticipated report released by the Labor Department on Wednesday showed a modest increase in U.S. consumer prices in the month of March.

The Labor Department said its consumer price index inched up by 0.1 percent in March after climbing by 0.4 percent in February. Economists had expected consumer prices to rise by 0.3 percent.

The uptick in consumer prices came as a continued advance in prices for shelter more than offset a steep drop in energy prices.

The report also showed the annual rate of consumer price growth slowed to 5.0 percent in March from 6.0 percent in February.

The year-over-year growth was slower than the 5.2 percent expected by economists and marks the smallest 12-month increase since May 2021.

Meanwhile, the report said core consumer prices, which exclude food and energy prices, rose by 0.4 percent in March after advancing by 0.5 percent in February. The increase matched economist estimates.

The core price growth reflected the increase in prices for shelter as well as higher prices for motor vehicle insurance, airline fares, household furnishings and operations, and new vehicles. Decreases in prices for medical care and used cars and trucks helped limit the upside.

The annual rate of growth by core consumer prices accelerated to 5.6 percent in March from 5.5 percent in February, which was also in line with expectations.

"Though inflation has moderated, the March consumer price data keeps a 25bps rate hike by the Fed clearly on the table for May," said Ryan Sweet, Chief U.S. Economist at Oxford Economics. "However, the odds of a pause in June are rising."

He added, "The Fed has made it clear that the decision to hike at the last meeting was a close one, but services inflation remains strong, and the labor market is tight, therefore their work isn't done."

On Thursday, the Labor Department is scheduled to release a separate report on producer price inflation in the month of March.

Economists currently expect producer prices to come in unchanged in March after edging down by 0.1 percent in February. The annual rate of growth is expected to slow to 3.0 percent from 4.6 percent.