Inflation cooled last month. Here’s where consumers got the most relief

Photo (c) G0d4ather - Getty Images

Paying the rent continues to get more costly

Consumers continued to pay more to put a roof over their heads in March but food prices appear to have peaked, at least for now. The Labor Department’s Consumer Price Index (CPI) rose just 0.1% last month, for an annual inflation rate of 5%.

The cost of shelter was by far the largest contributor to the monthly all-items increase in inflation. It more than offset a decline in the energy index, which fell 3.5% over the month as all major energy component indexes declined. The food index was unchanged in March.

The shelter index reflects rents as well as home ownership costs. The cost of shelter rose 0.6% from February and is rising at an annual rate of 8.2%.

As noted, energy prices tumbled thanks to the slide in gasoline prices. Gas prices fell 4.6%  in March and are down more than 17% year-over-year. That good news is tempered, however, by sharp increases in prices at the pump so far in April.

Perhaps the best news in the report concerns food prices. In March, overall food prices were unchanged from February, when prices rose 0.4%. For the first time since inflation took hold of the U.S. economy the cost of food purchased at grocery stores and consumed at home went down, falling 0.3%. For the last 12 months, those costs are up 8.4%.

Eating at restaurants, meanwhile, continued to get more expensive. The cost of food consumed away from home increased by 0.6% and is up 8.8% since March 2022.

Egg prices finally fall

Breaking down grocery costs, three of the six major grocery store food group indexes decreased in March. The index for meats, poultry, fish, and eggs fell by 1.4%. Eggs were also a lot cheaper, with prices falling nearly 11%.

The fruits and vegetables index declined by 1.3% over the month, and the dairy and related products index decreased by 0.1%.

The gap continued to widen last month between new and used cars. Used car prices fell another 0.9% while the cost of new cars and trucks rose 0.4%. Over the last 12 months, the price of used vehicles has fallen 11.2% while new car prices have risen 6.1%.

Consumers continued to pay more for car insurance last month with premiums rising 1.2%. Travel also got more expensive with airfares rising by 4%.

Could your debt be reduced or forgiven? Take our financial relief quiz.