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US core CPI for March falls short of economists' forecasts

By Alexander Bueso

Date: Wednesday 10 Apr 2019

US core CPI for March falls short of economists' forecasts

(Sharecast News) - Inflationary pressures in the States picked up last month, as energy prices extended their recent rebound, but the underlying picture was one of more subdued price increases.
According to the US Department of Labor, in March the year-on-year rate of gain in headline consumer prices increased from 1.5% for February to 1.9% in March (consensus: 1.8%), as energy prices jumped by 3.5% from one month to the next.

Stoking the jump in the latter, gasoline and fuel oil prices climbed by 6.2% and 6.5%, respectively, in comparison to the month before.

At the 'core' level however, CPI was held back by a 1.9% drop month-on-month in apparel prices, with the annual rate of gains dipping from 2.1% to 2.0% (consensus: 2.0%) - a 13-month low.

Used car and truck prices also declined, falling by 0.4% against February.

Commenting on Wednesday's figures, Andrew Hunter at Capital Economics said the dip in core CPI might be linked to Labor's decision to change how it calculates price changes in clothing, by incorporating real-time transactions from "a major retailer".

But used car prices had retreated and those for medical care commodities were stuck in negative territory.

Hunter also reiterated his conviction that the Federal Reserve, the US central bank, would cut rates before 2019 was out.

"Overall, with unit labour cost growth slowing and the dollar's prior appreciation putting downward pressure on imported goods prices, we continue to expect core inflation to remain close to its current muted level."



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