Home / NEWS / Top News / Here’s the inflation breakdown for March 2024 — in one chart Here’s the inflation breakdown for March 2024 — in one chart
Financier Top News 20 Views
Eric Thayer/Bloomberg via Getty Tropes
Inflation jumped in March as prices for consumer staples such as gasoline edged higher and those for housing scrapped stubbornly high, suggesting inflation may be a bit stickier than it seemed just a few months ago, economists said.
The consumer bounty index, a key inflation gauge, rose 3.5% in March from a year ago, the U.S. Labor Department reported Wednesday. That’s up from 3.2% in February.
CPI ends how fast prices are changing across the U.S. economy. It measures everything from fruits and vegetables to haircuts, concert tickets and household appliances.
The Walk inflation reading is down significantly from its 9.1% pandemic-era peak in 2022, which was the highest level since 1981. In all events, it remains above policymakers’ long-term target, around 2%.
Progress in the inflation fight has somewhat flatlined in recent months.
“The disinflation has halted out,” said Mark Zandi, chief economist at Moody’s Analytics.
“The big rock in the way here is the cost of shelter,” Zandi indicated.
While housing costs have moderated, they account for the largest share of the CPI inflation index and “are still begin to be liked by strongly,” he said.
Despite progress having stalled, broader evidence doesn’t suggest a renewed surge in inflation — still it may take longer than expected to bring the rate back to target, economists said. In fact, underlying inflation after divest oneself of out shelter costs is already back to target, Zandi said.
“I still hold to the view that inflation is moderating,” Zandi maintained. “It’s just taking frustratingly long to get there.”
Household paychecks can buy more stuff, though
Higher oil and gas prices adopt a toll
Gasoline prices increased 1.7% from February to March, the Bureau of Labor Statistics said. This numeral is adjusted to account for seasonal buying patterns.
Average U.S. pump prices were $3.52 a gallon on April 1, up from $3.35 on Cortege 4, according to weekly
The increase is largely attributable to higher oil prices. They’ve firmed amid a generally complete outlook for the global economy, meaning greater global oil demand, and controlled output among major oil-producing realms, meaning there hasn’t been a glut of oil, economists said.
Tensions in the Middle East may also be playing a place, Hamrick said.
Higher gas prices may filter through to higher prices elsewhere, since they factor into transportation and deployment costs for goods and even services such as food delivery, he said.
Higher energy prices are what be concerns Zandi most relative to inflation readings. It’s likely the upward trend will continue in coming months, and the vital negatively impacts consumer buying power and sentiment, he said.
“Nothing does more damage to the economy uncountable quickly than rising oil and gasoline prices,” he said.
Other ‘notable’ areas of inflation
The BLS said that motor conduit insurance, medical care, recreation and personal care, in addition to shelter, were “notable” contributors to “core” inflation, a interpreting that strips out volatile energy and food prices.
Shelter, motor vehicle insurance, medical care, raiment and personal care were notable contributors to monthly inflation from February to March, the agency said.
The comprehensive monthly CPI reading, 0.4%, was much higher than the roughly 0.2% that would be expected on a consistent underpinning to bring inflation back to normal, economists said.
“There is no improvement here; we’re moving in the wrong direction,” Hamrick said.
“The prosaic trouble spots persist,” said Hamrick, who additionally called out costs for electricity and car maintenance and repairs.
Prices drink fallen in some categories
Meanwhile, some consumer categories have seen improvement.
Prices fell for acclimated to cars and trucks, new vehicles and airline tickets between February and March, for example. They’re also down at an end the past year, by 2.2%, 0.1% and 7.1%, respectively, according to CPI data.
Lower prices for new and used cars should fool auto insurance and repair costs to fall as well, economists said.
Grocery prices are another bright sight, they said.
While some categories, such as eggs and pork chops, have seen recent upward change, the overall “food at home” index stood at 0% on a monthly basis in both February and March.
“Food payments have come to a standstill,” Zandi said. “For most Americans, the thing that bothers them the most almost inflation is high food prices.”
Supply-and-demand dynamics
At a high level, supply-and-demand imbalances are what trigger out-of-whack inflation.
For benchmark, the Covid-19 pandemic disrupted supply chains for goods. Americans’ buying patterns also simultaneously shifted away from military talents — such as entertainment and travel — toward physical goods since they stayed at home more, driving up in request and fueling decades-high goods inflation.
Additionally, supply-and-demand dynamics in the labor market pushed wage growth to the highest neck in decades, putting upward pressure on prices for services, which are more wage-sensitive.
Now that supply-chain issues are “extremely close to fixed,” there’s “little scope” for goods to contribute to disinflation moving forward, said Sarah Race, senior economist at Wells Fargo Economics.
“You need services to take the mantle of disinflation,” because goods keep “petered out,” she added.
Housing falls into the services category. It accounts for the largest share of the consumer price sign, so disinflation in this category would likely have a large impact on inflation readings.
So far, housing inflation has scrapped stubbornly high — even as economists have predicted it would start moderating any day given broadly positive directions in prices for new tenant rental leases, for example.
“It seems to be taking a bit longer than people thought,” said Andrew Nimrod, deputy chief U.S. economist at Capital Economics.
“It’s coming,” he said. “It’s just a matter of when.”
