US Consumer Price Index (CPI) Decreases in March, but Core Inflation Still High

The Consumer Price Index (CPI) in the United States increased at an annual rate of 5% in March, down from 6% in February, according to the Labor Department. The overall increase in consumer prices was 5% from a year earlier, which is down from 6% in February and a 40-year high of 9.1% last June. The CPI is a broad measure of the price for everyday goods, including gasoline, groceries, and rents.[0] The decrease in CPI was better than economists' expectations that inflation had risen 5.2% last month, according to FactSet.[1]

While the decrease in CPI may suggest good news, some underlying prices remain stubbornly high, and core consumer price gains increased. The so-called core CPI, which excludes the volatile food and energy categories, increased 5.6% from a year earlier, slightly more than in February. Economists consider the core CPI a better measure of underlying inflation.[2] Core CPI, excluding food and energy, rose 0.4% versus February levels, matching expectations. The yearly rate of core inflation increased slightly to 5.6%, in line with predictions.[3] In September, the core CPI inflation rate reached a record high of 6.6% that hasn't been seen in 40 years.[3]

Core CPI is a measure of the change in consumer prices excluding energy and food, which are generally the most volatile components of CPI.[4] Economic experts anticipate that the core Consumer Price Index (CPI) will increase from 5.5% to 5.6% annually for the month of March.[4] The data showed that while inflation is still well above where the Federal Reserve feels comfortable, it is at least showing continuing signs of decelerating.[5] Maintaining inflation at approximately 2% is the objective of policymakers in order to achieve a robust and enduring growth rate.[6] The CPI saw its smallest headline increase since June 2021.[6]

Though inflation is decelerating, US grocery prices are still up 8.4% annually, according to the Bureau of Labor Statistics' March CPI. The cost of groceries is up 8.4% compared to March 2022, though it's down from 10.2% in February.[7] Although there has been a monthly decrease, groceries are still costly when looking at it on a yearly basis.[8] During that period, there was an increase of 8.8% in menu prices.[8]

Rent prices were “by far” the biggest contributor to overall inflation, more than offsetting a decline in energy prices, which decreased 3.5% over the month. Rent continued to be the biggest driver of inflation, but the increase slowed notably. Although the rent has increased by 0.5% from the previous month, which is lower than the 0.8% increase in February, it has surged by 8.8% over the past year.[0] Later this year, rents are predicted to decrease by economists, taking into consideration new lease agreements.[4] Energy prices fell by 3.5%, and food prices remained flat during the month.[9] The prices of fruits and vegetables decreased by 1.3%, whereas dairy products experienced a slight decrease of 0.1%.[10] The other indexes, for non-alcoholic beverages, cereals and bakery products, and all other groceries, went up.[11]

In an effort to curb inflation and slow down the economy, the Federal Reserve has implemented the most aggressive interest rate increase in decades. Although the Fed has no intention of reducing interest rates in the current year, the most recent economic information suggests that a break may be imminent.[5] During his speech at the Economic Club of Chicago on Tuesday, Austan Goolsbee, President of the Chicago Fed, emphasized the need for prudence and patience in monetary policy following the “financial stress” caused by the collapse of Silicon Valley Bank.[12]

In conclusion, while the decrease in CPI may suggest good news, some underlying prices remain stubbornly high, and core consumer price gains increased.

0. “Inflation eased in March to 5%, but core prices remain stubbornly high” Fox Business, 12 Apr. 2023,

1. “Inflation in March cools to 5%” CBS News, 12 Apr. 2023,

2. “Inflation is cooling, giving the Fed Reserve some breathing room as a recession looms” The Boston Globe, 12 Apr. 2023,

3. “CPI Inflation Rate Cools, Lifting S&P 500 Futures; The Fed Would Be Crazy To Hike | Investor's Business Daily” Investor's Business Daily, 12 Apr. 2023,

4. “March CPI rose 5% as core inflation increased 5.6%. Live updates.” USA TODAY, 12 Apr. 2023,

5. “March CPI Report: What the Experts Are Saying About Inflation” Kiplinger's Personal Finance, 12 Apr. 2023,

6. “Inflation rises just 0.1% in March and 5% from a year ago as Fed rate hikes take hold” CNBC, 12 Apr. 2023,

7. “Inflation: Egg and other grocery prices start to crack” Yahoo Finance, 12 Apr. 2023,

8. “Food prices ease for the first time since 2020; Here's what's getting cheaper” WYFF4 Greenville, 12 Apr. 2023,

9. “Energy Prices May Not Deflate the CPI for Long” Barron's, 12 Apr. 2023,

10. “US inflation rate falls to 5.0%; BoE’s Andrew Bailey doesn’t see ‘systemic banking crisis’ – as it happened” The Guardian, 12 Apr. 2023,

11. “Food prices ease for the first time since 2020. Here's what's getting cheaper”, 12 Apr. 2023,

12. “CPI report means US might avoid recession, higher interest rates” Business Insider, 12 Apr. 2023,

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