Inflation re-accelerated in March

Prices in the United States jumped 0.9% in March from February, triple February’s 0.3% increase, and the fastest monthly rise since June 2022. Over 12 months, inflation moved back up to 3.3% from 2.4% in February. (bls.gov) Most of that March jump came from energy. The energy index rose 10.9% in one month, and gasoline alone surged 21.2%, accounting for nearly three quarters of the entire monthly increase in the Consumer Price Index. (bls.gov) That is why this report feels different from the slow, sticky inflation people had been living with. A spike at the gas pump works like a tax on everything that has to be driven, flown, shipped, or delivered. (cbsnews.com) The immediate trigger was the oil shock tied to the Iran war. CBS reported that Brent crude traded around $73 a barrel before the war began on February 28 and was at $95.88 on Friday morning, after disruption around the Strait of Hormuz, one of the world’s key oil chokepoints. (cbsnews.com) The March report is also the first inflation snapshot that fully catches that shock landing in household budgets. CBS said United States drivers were paying about $4.15 a gallon on Friday, and gasoline prices had climbed nearly 40% since the conflict began. (cbsnews.com) Under the surface, the report was less explosive than the headline. Inflation excluding food and energy rose 0.2% in March and 2.6% over the year, which means the biggest burst came from fuel rather than a broad-based jump across every category at once. (bls.gov) Housing kept rising too, just more slowly. Shelter increased 0.3% in March and 3.0% over the year, so rent and housing costs are still adding pressure even in a month dominated by gasoline. (bls.gov) Food was mixed in March, which is why many shoppers can feel squeezed even when the top-line food number looks calm. The overall food index was unchanged for the month, but restaurant prices still rose 0.2%, and experts told CBS that higher diesel and shipping costs could push grocery prices higher in April. (bls.gov) (cbsnews.com) Coffee is a good example of how that squeeze shows up in small daily purchases. The New York Times reported coffee prices were up 18.7% from a year earlier and 1.3% in March alone, turning a routine item into another reminder that “inflation” often means a few extra dollars disappearing one receipt at a time. (nytimes.com) This also complicates the Federal Reserve’s next move. Reuters said the March surge, combined with tariff pass-through, further reduced hopes for an interest rate cut this year, because a central bank cannot easily lower borrowing costs while headline inflation is jumping away from its 2% target. (reuters.com) There is one reason economists are not treating March as a full return to 2022-style inflation. If oil stops climbing and the ceasefire announced this week holds, the energy shock could fade faster than rent or wages do, but CBS noted that pump prices usually fall more slowly than they rise and relief may take weeks. (cbsnews.com)