Inflation accelerated sharply in March, with consumer prices rising 0.9% for the month — triple February’s pace.
Annual inflation climbed to 3.3%, up from 2.4% in February, reversing recent cooling trends.
Energy — especially gasoline — drove much of the increase, while core inflation remained comparatively moderate.
It really wasn’t much of a surprise. As gasoline prices surged in March, so did inflation.
The Consumer Price Index (CPI), a key measure of inflation, rose 0.9% in March on a seasonally-adjusted basis, a sharp increase from the 0.3% gain recorded in February, according to the Bureau of Labor Statistics.
On an annual basis, inflation climbed 3.3% over the 12 months ending in March, marking a notable jump from February’s 2.4% year-over-year rate, and interrupting a broader disinflation trend that had been in place since 2022.
The surge was driven largely by energy costs, particularly gasoline. The BLS said rising fuel prices were a major factor behind the overall increase, highlighting the continued sensitivity of inflation to volatile energy markets.
Most of the rise was food and energy
Core inflation — which excludes food and energy — was more subdued, increasing 0.2% in March and 2.6% over the past year. This suggests that underlying price pressures, while still above the Federal Reserve’s 2% target, are not rising as quickly as headline inflation.
Among food categories, fruits and vegetables led the increase in food prices, rising 0.4% from February and 4% year-over-year, as higher transportation costs showed up in prices. Four food categories, including meat and dairy, saw prices fall during March.
Higher housing costs
Housing-related costs remained a key contributor. The shelter index rose 0.3% for the month, with rent and owners’ equivalent rent continuing to climb, underscoring persistent pressure in the housing sector.
Other categories showed mixed results. Airline fares jumped 2.7%, and apparel prices rose 1.0%, while medical care costs declined and prescription drug prices fell.
The March data highlights the uneven nature of inflation in the current economy. While some categories are stabilizing or even declining, spikes in energy and transportation costs can quickly push overall inflation higher.