US CPI undershoots by a wide margin in March
By Alexander Bueso
Date: Thursday 10 Apr 2025
(Sharecast News) - The cost of living in the US came in under economists' forecasts for the month of March, with inflation dragged down by a slump in energy quotes.
According to the Department of Labor, in seasonally adjusted terms, the Consumer Price Index dipped by 0.1% month-on-month (consensus: 0.2%).
That served to push the year-on-year rate of advance in headline CPI down to 2.4%.
Consensus had been that inflation would slow from 2.8% to 2.6%.
Energy prices dropped by 2.4% over the month, led by a 6.3% slump in gasoline prices, helping to offset a 0.4% rise in food prices by a big margin.
Core CPI, which excludes food and energy prices, on account of their volatility, also undershot.
Underlying prices edged up by only 0.1% on the month (consensus: 0.3%).
The annual rate of increase in core CPI printed at 2.8% (consensus: 3.0%).
Commenting on the latest price data, Stephen Brown, Deputy Chief North America at Capital Economics, attributed the slight 0.06% rise in core CPI to the "steep" drops in hotel prices and airline fares.
Those, he said, had come in response to softer domestic demand in the US and a recent decline in tourist visits from Canada.
Even so, in his opinion, core CPI would likely stage a sharp increase once tariffs began to feed through.
Hence his expectation that the Fed would remain on hold throughout 2025.
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