Inflation remains higher than the Federal Reserve’s target, but is showing some signs of slowing.
The 12-month price increase was 5 percent in March, the smallest annual increase reported since May 2021, according to the Consumer Price Index released Wednesday by the U.S. Bureau of Labor Statistics. In February, annual inflation was at 6 percent.
The new numbers come after the Federal Reserve issued in March another increase of 25 basis points in the target rate for federal funds. The new target range is 4.75 to 5 percent. It was the ninth rate increase in the past year and second straight hike of a one-quarter of a point. Previous hikes ranged from three-quarters to half a point.
The CPI grew by 0.1 percent in March from February. Increased prices for transportation services and shelter led the increases in the month.
“The index for shelter was by far the largest contributor to the monthly all items increase. This more than offset a decline in the energy index, which decreased 3.5 percent over the month as all major energy component indexes declined,” the BLS press release noted.
For the year, shelter costs are up 8.2 percent.
Notably, car insurance costs increased again in March by 1.2 percent. In the past 12 months, car insurance on the index has increased by 15 percent. New vehicle prices have also increased by 6.1 percent in the past year.
The used car and truck price index dropped 0.9 percent, its lowest decrease in the CPI in months. For the year, used vehicles are down 11.2 percent. It is an improvement from the 13.6 percent drop reported for the 12-month period in February.
