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Economy in Brief

U.S. Consumer Price Inflation Picks Up as Both Energy & Core Prices Strengthen in March
by Tom Moeller  April 13, 2021

• Higher energy prices lead last month's gain.

• Services price inflation continues to accelerate.

• Core goods prices pick up.

Price inflation at the retail level is accelerating as demand firms. The Consumer Price Index rose 0.6% (2.6% y/y) during March following an unrevised 0.4% February increase. It was the quickest rise since August 2012. The gain compared to an expected 0.5% rise in the Action Economics Forecast Survey. The CPI excluding food & energy rose 0.3% last month (1.6% y/y) after a 0.1% uptick in February. It was the strongest increase since August of last year. A 0.2% March rise had been expected.

Another strong increase in energy prices provided impetus to last month's increase with a 5.0% jump (13.2% y/y), following three months of strong increase. Gasoline prices jumped 9.1% (22.5% y/y), strong for the fourth straight month. Fuel oil prices rose 3.2% (NSA, 20.2% y/y) after surging 9.9%. Natural gas prices strengthened 2.5% last month (9.8% y/y) while the cost of electricity held steady (2.5% y/y) after surging 0.7% in February.

Services prices strengthened 0.4% (1.6% y/y) during March, the strongest increase since July. Transportation services prices surged 1.8% (-1.6% y/y) as the cost of motor vehicle insurance jumped 3.3% (-2.5% y/y). Recreation services prices rose 0.8% (1.2% y/y) after rising 0.6% in February. The cost of public transportation strengthened 0.7% (-8.2% y/y), the first increase in four months. Shelter costs rose 0.3% (1.7% y/y), the strongest rise since February of last year. The owners' equivalent rent of primary residences increased 0.2% and rose a greatly lessened 2.0% y/y. Education & communication services prices improved 0.1% (2.0% y/y). Medical care services prices edged 0.1% higher (2.7% y/y) following two straight months of 0.5% increase.

Goods prices excluding food & energy improved 0.1% (1.7% y/y) in March after falling 0.2% during February. Apparel prices fell 0.3% (-2.5% y/y) following a 0.7% drop. Continuing to decline were prices for education & communication goods which dropped 1.8% (-4.9% y/y), off for a third straight month. Sporting goods prices fell 1.3% (+4.8% y/y). Recreation product prices eased 0.2% (+0.8% y/y). New vehicle prices were roughly steady (1.5% y/y) for a second month but used car & truck prices rose 0.5% (9.4% y/y) following three straight months of 0.9% decline. Medical care product costs improved 0.1% (-2.4% y/y) following six straight months of decline. Household furnishings prices rose 0.4% last month (2.8% y/y) while household appliance prices jumped 1.1% (7.9% y/y), strong for the second straight month.

Food price inflation was tame last month as prices edged 0.1% higher (3.5% y/y) last month for the second time in the last three months. Food-at-home prices rose 0.1% (3.3% y/y). Dairy prices fell 0.5% (+1.6% y/y), off for a third straight month, while cereal & bakery product costs eased 0.1% (+2.6% y/y). Fruit & vegetable prices jumped 1.0% (3.8% y/y) after rising 0.5% in February. Meat, poultry & fish prices eased slightly (+5.4% y/y) while egg prices rose 2.0% (4.7% y/y), strong for the third straight month. Nonalcoholic beverage prices eased 0.2% (+3.2% y/y). Prices for food away-from-home rose 0.1% NSA for a second straight month (3.7% y/y).

The Consumer Price Index data can be found in Haver's USECON database with additional detail in CPIDATA. The Action Economics survey figure is in the AS1REPNA database.

Consumer Price Index, All Urban Consumers (% chg) Mar Feb Jan Mar Y/Y 2020 2019 2018
Total 0.6 0.4 0.3 2.6 1.2 1.8 2.4
Total less Food & Energy 0.3 0.1 0.0 1.6 1.7 2.2 2.1
  Goods less Food & Energy 0.1 -0.2 0.1 1.7 0.1 0.2 -0.2
  Services less Energy 0.4 0.2 0.0 1.6 2.2 2.8 2.9
 Food 0.1 0.2 0.1 3.5 3.4 1.9 1.4
 Energy 5.0 3.9 3.5 13.2 -8.5 -2.1 7.5
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