March Spike in Consumer Prices Fueled by Rising Cost of Gasoline, Shelter

Craig Bannister | April 10, 2024
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The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.4 percent again in March – matching the largest monthly rise since September 2023 – on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics (BLS) reported Tuesday.

The 12-month increase in prices also intensified in March. Compared to the same month in 2023, the all-items index rose 3.5 percent, higher than last month’s 3.2% February-to-February rise.

The increases exceeded analysts’ expectations for the third straight month, signaling that inflation has leveled off at a rate that's higher than the Federal Reserve’s two percent rate target rate, which could foreshadow a hike in interest rates.

"This was a painful report with few bright spots for consumers," according to Navy Federal Credit Union Corporate Economist Robert Frick.

Price increases in the gasoline (+1.7 percent) and shelter (+0.4 percent) indexes combined to account for more than half of March’s month-to-month all-items rise.

The energy index was up a seasonally-adjusted 1.1 percent over the month, fueled by the spike in the cost of gasoline. The seasonally-adjusted cost of electricity rose 0.9 percent from February, while the 12-month increase came in at 5.0 percent.

The 0.4 percent rise in the cost of shelter was unchanged from February’s monthly increase. Over the last 12 months, the cost of shelter is 5.7 percent higher – second only to the 10.7 percent year-to-year surge in the cost of transportation services.

For the third straight month, the “core” inflation rate (all items less food and energy) rose 0.4 percent in March – matching the largest monthly increase since April 2023 (0.4%).

In March, the core index was up 3.8 percent from 12 months earlier, equaling February’s year-to-year rise.

The 0.4 percent shelter index increase in March was the largest factor in the monthly increase in the index for all items less food and energy. The index for rent rose 0.4 percent over the month, as did the index for owners' equivalent rent.

The business and economic reporting of is funded in part with a gift made in memory of Dr. Keith C. Wold.