**MNI 5 Things:March CPI Below Expectations -0.1%, Core +0.2%>

--5 Things We Learned From The March CPI Data

By Kevin Kastner, Sara Haire and Holly Stokes

     WASHINGTON (MNI) - The following are the key points from the 

Consumer Price Index data for March released by the Bureau of Labor 

Statistics Wednesday: 

     - March CPI fell 0.1% month/month, below expectations for a flat 

reading. Unrounded it was -0.063%, so it was on the side leaning toward 

flat. Either way, the headline number was below the +0.2% whisper number 

that some market participants were looking for, so some welcome surprise 

for inflation hawks is possible. 

     - Core CPI rose 0.2% (+0.176% unrounded), as expected, with the 

large owners' equivalent rents category up 0.3%, lodging away from home 

prices up 2.3% and medical care prices up 0.4%. These offset a flat 

reading for new vehicles prices, a 0.3% decline in used car prices, and 

a 0.6% decline in apparel prices. 

     - The CPI data are generally well forecasts by analysts, especially 

for core prices. The combination of Tuesday's sharp gains in overall and 

core PPI and the softer readings for today's CPI will give analysts 

something to think about. 

     - The y/y rate for headline CPI rose to +2.4% in March vs +2.2% in 

February, while the y/y rate for core CPI rose to +2.1% from +1.8%. A 

weak reading in March 2017 due to cell phone plan prices was a key 

factor in that jump. 

     - Energy prices fell 2.8% for March after a 0.1% gain in February, 

with gasoline prices down 4.9%, electricity prices flat, and gas 

utilities prices down 1.2%. Energy prices were up 7.0% unadjusted, so 

seasonal adjustment issues were at play. CPI excluding only energy was 

up 0.2%. Food prices rose 0.1%, showing there was little pass-through 

from the large gain in food prices in Tuesday's PPI report. 

     ** MNI Washington Bureau: 202-371-2121 ** 

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