Inflation Comes in Lower Than Expected

Year-over-year rate in March was 5% after small bump in March
By Newser Editors and Wire Services
Posted Apr 12, 2023 8:27 AM CDT
Inflation Eases to Lowest in 2 Years
A shopper at a grocery store in Buffalo Grove, Ill., Sunday, March 19, 2023.   (AP Photo/Nam Y. Huh)

US consumer inflation eased in March, with less expensive gas and lower food prices providing some relief to households that have struggled under the weight of surging prices for nearly two years, per the AP.

  • Smaller than expected: The government said Wednesday that consumer prices rose just 0.1% from February to March, down from 0.4% from January to February and the smallest increase since December. CNBC notes that economists were expecting a bigger increase of 0.2%.
  • Two-year low: Measured from a year earlier, prices were up just 5% in March, down sharply from February’s 6% year-over-year increase and the smallest rise in almost two years. Much of the drop resulted from price declines for goods such as gas, used cars, and furniture that had soared a year ago after Russia’s invasion of Ukraine.

  • Core prices: Excluding volatile food and energy costs, so-called core inflation remains stubbornly high. Core prices rose 0.4% from February to March and 5.6% from a year earlier. The Federal Reserve and many private economists regard core prices as a better measure of underlying inflation.
  • Eyes on Fed: The big question is what effect the smaller-than-expected increase will have on the Fed's rate-cutting strategy to tame inflation. As an early gauge, Dow futures jumped more than 100 points after the report came out Wednesday, suggesting investors think the Fed will ease up on the hikes.
(More inflation stories.)

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