The Strategist

US inflation in March becomes the lowest in almost two years

04/14/2023 - 03:28

Inflation in the US was 5% yearly in March, reported the US Department of Labor. The previous low in was May 2021. Analysts polled by Reuters forecasted that March's inflation rate would be 5.2%.

U.S. Department of Agriculture
U.S. Department of Agriculture
Consumer prices increased 0.1% from February. Inflation was up 0.4% from January to 6% annually in February. The rate of inflation in the USA decreased for the ninth month in a row, after reaching a high of 9.1% in June.

Compared to February, gasoline prices dropped by 4.6% in March and electricity costs fell by 0.7%. Consumer costs for used automobiles (down 0.9%), medical services (down 0.5%), and food (down 0.3%) all decreased. Food prices have decreased for the first time since September 2020. In contrast, a number of other goods and services, including apparel (up 0.3%), new automobiles (up 0.4%), new homes (up 0.4%), and transportation services (up 1.4%), grew in March.

One factor that contributed to the slowing in inflation was the Fed's crucial rate increase in March, when it once more pushed the rates by 0.25 percentage points to 4.75-5%. The Fed's target for inflation is 2%, and it averaged 2.1% in the three years before to the epidemic, so it is still high.