The first plot shows the percentage changes in the CPI and Core CPI since 2000. Over the past two decades, both exhibited fluctuations but have spiked recently. As of early 2024, the CPI reached around 3.9%, while the Core CPI was around 3.5% - indicating elevated broad-based inflation.
The second plot focuses on the month-over-month changes in the last 12 months. The CPI showed volatility, ranging from 0.1% to 0.5% monthly increases. The Core CPI was relatively more stable, between 0.2% and 0.4% monthly rises.
In March 2024, the CPI increased 0.4% while the Core CPI rose 0.4%, signaling persistent inflation in both overall and core consumer prices.
The plots highlight challenges in managing high inflation across many categories. Further policy actions may be needed to rein in inflation towards target levels.
Inflation Remains Elevated as Consumer Prices Surge in March
The latest Consumer Price Index (CPI) data released by the Bureau of Labor Statistics shows that inflation remained stubbornly high in March 2024. The All Items CPI for urban consumers rose 4.5% over the last 12 months on an annualized basis.
While down slightly from the torrid 6.5% pace in early 2023, the 4.5% annual inflation rate is still more than double the Federal Reserve's 2% target. Persistent increases in housing, energy, and services costs continued to drive overall inflation higher.
Energy Prices Skyrocket
The energy index surged 13.6% over the past year, led by a stunning 20.8% jump in gasoline prices. This resurgence in energy costs came after a reprieve in late 2023 as oil production caught up with demand. However, turmoil in global energy markets reignited price pressures at the pump and for other energy components like electricity, which rose 11.0%.
Housing Inflation Escalates
Housing costs exhibited no signs of moderating, with the shelter index up 5.0% versus a year ago. Rapidly escalating rents, which rose 4.4% annualized, contributed significantly to this increase as home rental markets remained extremely tight. The housing index increased 5.6% overall.
Service Sector Costs Climb
Service prices continued their upward march, led by medical care costs rising 5.8% over the last 12 months. The services less energy index climbed 6.3% on an annualized basis, reflecting robust wage growth amidst persistent labor shortages in service industries.
Some Relief in Goods Prices
In a bit of good news, some goods categories showed declines over the past year. Used vehicle prices plunged 13.4%, new vehicle prices dipped 2.3%, and food at home costs were essentially flat, down 0.1%. However, these declines were more than offset by increases in other goods like apparel (+7.8%) and commodities less food & energy (+4.3% annualized).
The March CPI report underscores the stickiness of inflation pressures across many sectors of the economy. With the labor market still very tight, the Federal Reserve will likely continue raising interest rates to try to cool stubborn price growth. Consumers can expect elevated inflation to persist in the coming months based on this latest data.
No comments:
Post a Comment