The Economy

U.S. Consumer Prices Inched Upward in March

Inflation pressures remained modest, despite a 2.2%, 12-month increase in core prices.
Katie Kuehner-HebertApril 14, 2016

While consumer prices finally started rising again in March, inflation pressures remain modest, leaving many economists to predict that the Federal Reserve will keep interest rates at their current level.

The consumer-price index last month rose a seasonally adjusted 0.1% from February, the Labor Department said Thursday. Overall prices last increased in November. Core prices, which exclude food and energy prices, also rose 0.1%. Economists surveyed by The Wall Street Journal had expected both overall and core prices to grow 0.2% in March.

Over the last 12 months, the all-items index rose 0.9% percent before seasonal adjustment, the slowest annual gain so far this year. Core prices rose 2.2% from a year earlier.

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The major component indexes were mixed in March, the Bureau of Labor Statistics said. Prices rose for shelter, recreation, medical care, education, tobacco and personal care, while prices fell for airline flights, communications, household furnishings and operations, and used cars and trucks.

“Modest inflation pressure outside of energy gyrations is in line with the broader U.S. economy,” The Wall Street Journal wrote. “Job growth has been solid and wage growth steady, but not robust.”

The Fed will not raise its benchmark interest rate again until officials see evidence of firmer inflation and improvement in the labor market. The central bank raised the short-term rate in December, but hasn’t moved since then.