News & Insights

In March, consumer prices increased 0.9% from February and 3.3% over the year, up from the 2.4% annual rise in February and the greatest over-the-year increase since April 2024. Core CPI, which excludes more volatile energy and food prices, rose 0.2% from February and 2.6% over the year, up slightly from the 2.5% 12-month increase the month prior.

Energy costs jumped 10.9% over the month in March, after advancing 0.6% in February. Over the year, energy costs surged 12.5%, after ticking up 0.5% year-over-year in February. Within the energy index, gasoline prices soared 21.2% in March and 18.9% over the year, while fuel oil prices climbed 30.7% month-over-month and 44.2% year-over-year. Meanwhile, electricity prices grew 0.8% in March and 4.6% from March 2025, while natural gas prices declined 0.9% over the month but were still up 6.4% over the year.

In March, food prices stayed the same over the month but increased 2.7% over the year, down from the 3.0% year-over-year advance in February. Prices for food at home edged down 0.2% from February but rose 1.9% from March 2025, while prices for food away from home moved up 0.2% month-over-month and 3.8% year-over-year. Of the different food groups, beef and veal and coffee continue to rise at the fastest pace, surging 12.1% and 18.7% over the year, respectively.

The shelter index advanced 0.3% from February and 3.0% over the year, consistent with the 3.0% annual gain in February. Meanwhile, prices for used cars and trucks fell 0.4% over the month and 3.2% over the year, while new vehicle prices ticked up 0.1% over the month and 0.5% from March 2025. Relatedly, prices for motor vehicle maintenance and repair jumped 1.3% month-over-month and 6.1% year-over-year.

The headline inflation rate is still above the Federal Reserve’s target of 2.0% and continues to creep up from its 2025 lows. Despite labor market risks persisting, Federal Reserve officials held their interest rate target steady at their January and March meetings, and markets anticipate that the Federal Open Market Committee will keep its interest rate target unchanged again at the meeting later this month as risks to the Federal Reserve’s inflation mandate rise.