The U.S. consumer price index (CPI) for March, reflecting the impact of a surge in international oil prices, rose 3.3% from a year earlier. However, core inflation excluding energy and food fell short of market expectations, prompting assessments that the inflation trend was not uniform.
The U.S. Department of Labor said on the 10th (local time) that the CPI for March rose 3.3% from a year earlier. The month-over-month increase was 0.9%, widening sharply from 0.3% in February. The year-over-year rise in the headline CPI climbed back into the 3% range within a month from 2.4% in February and largely matched market projections.
Still, rather than prices broadly heating up in unison, the jump in energy appears to have pulled up the overall index. Energy prices in March jumped 10.9% from the previous month, and gasoline in particular surged 21.2%, accounting for nearly three-quarters of the monthly CPI increase. In contrast, food prices were flat from the previous month, and prices for food at home fell 0.2%. Shelter rose 0.3%, continuing to exert upward pressure, but analysts said the core of the price shock was the oil price spike following heightened tensions in the Middle East.
Core CPI, which excludes volatile energy and food, rose just 2.6% year over year and 0.2% month over month. Both figures were below analysts' expectations of 2.7% and 0.3%, respectively. By category, airfares, apparel, education costs and new car prices increased, while medical costs, used car prices and personal goods prices declined.
In markets, the data drew the assessment that "the headline was shaken by the oil shock, but core inflation was relatively stable," along with the view that the Federal Reserve (Fed) could become more cautious about cutting interest rates for the time being.