March CPI Shows Signs of Deceleration, Energy Costs Fall and Food Prices Remain Flat

👋GM Valued Readers,

The CPI number was released this morning:

KEY POINTS

• The consumer price index rose 0.1% in March and 5% from a year ago, below estimates.

• Excluding food and energy, core CPI accelerated 0.4% and 5.6%, both as expected.

• Energy costs fell and food prices were flat. Used vehicle prices also declined.

• A 0.6% increase in shelter costs was the smallest gain since November, but still resulted in prices rising 8.2% on an annual basis.

The data showed that while inflation is still well above where the Fed feels comfortable, it is at least showing continuing signs of decelerating. Policymakers target inflation around 2% as a healthy and sustainable growth level. The headline increase for CPI was the smallest since June 2021.

A 3.5% drop in energy costs and an unchanged food index helped keep headline inflation in check. Food at home fell 0.3%, the first drop since September 2020, though it is still up 8.4% from a year ago. Egg prices, which had been soaring, tumbled 10.9% for the month, putting the 12-month increase at 36%.

Happy Investing Fellow Defions

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