APRIL 17, 2023 – INFLATION FALLS FOR THE NINTH MONTH IN A ROW TO 5 PERCENT
US Inflation rose 0.1 percent in March and is up 5 percent from a year ago, with the data coming in below analyst expectations. 5 percent is the smallest 12-month increase in nearly two years. The March figure marks the ninth consecutive year-over-year decline in inflation.
Excluding food and energy, the core CPI is up 0.4 percent for the month and 5.6 percent year-over-year, which was expected. The main driver of CPI is housing costs which make up nearly a third of the calculation. If shelter was excluded from the calculation, the CPI would be up 3.4 percent from a year ago.
Inflation remains well above the Fed’s 2 percent target, but it is moving in the right direction. The Fed has raised rates nine times since 2022 in efforts to slow down the economy and tame inflation. In light of slowing inflation, and the worsening employment figures from last week’s report, markets are hoping the May 2-3 meeting will mark the last Fed rate hike for a while. As it stands, expectations are for one final 0.25 percent increase for 2023.