Washington — Consumer prices in the United States increased sharply in March, pushing the annual inflation rate to 3.3 percent. The Consumer Price Index (CPI) jumped nearly a full percentage point from February, according to data released by the Bureau of Labor Statistics on Tuesday.
The rise was driven primarily by higher costs in housing and energy, which offset modest declines in food prices. Shelter costs, which include rent and homeowners' equivalent rent, accounted for over half of the monthly increase. Gasoline prices also contributed, rising 1.7 percent after two consecutive months of declines.
Economists had expected a smaller rise, with forecasts centered around a 3.1 percent annual rate. The unexpected acceleration complicates the Federal Reserve's plans to ease interest rate hikes. Fed officials have signaled caution in adjusting monetary policy until inflation shows sustained progress toward their 2 percent target.
Core inflation, which excludes volatile food and energy prices, held steady at 3.8 percent. This measure remains well above the Fed's comfort zone and suggests underlying price pressures persist despite recent banking sector stress and tighter credit conditions.
Markets reacted cautiously. The 10-year Treasury yield edged up after the report, while the S&P 500 slipped into negative territory. Traders reduced bets on near-term rate cuts, pricing in only a 60 percent chance of a June reduction compared to 75 percent before the data.
Source: e24.no