MNI BRIEF: US March Core CPI Above Expectations For 3rd Month
Three-month trend rates for both core and supercore CPI accelerated last month, adding to worries that higher inflation will delay Fed rate cuts.
U.S. CPI excluding food and energy prices rose 0.359% in March, higher than analysts expected for a third straight month, and 3.8% from a year ago, the Bureau of Labor Statistics said Wednesday.
Headline CPI increased 0.378%, bringing the annual rate to 3.5%. The widely watched data add to worries that firmer U.S. inflation data since the start of the year will delay interest rate cuts by the Federal Reserve this year, with market pricing easing to just two cuts this year after the CPI report, compared to the three projected by Fed officials last month.
The three-month trend rate for both core CPI and supercore CPI accelerated further to 4.5% and 7.6% in March from 4.2% and 6.9% in February, respectively, according to an MNI calculation. Supercore CPI is a measure of core services costs excluding housing. Shelter rose 0.4% in March, in line with expectations, and remains the largest factor driving core CPI higher. Driving supercore was medical services and car insurance last month. (See: MNI INTERVIEW: Fed Not Restrictive, May Need To Hike-Levin)