MNI DATA ANALYSIS: US March CPI Falls 0.1%, Core +0.2%>

--Overall CPI Rise To 2.4% Y/Y, Core Up To +2.1% Y/Y On Base Issues

By Kevin Kastner, Sara Haire and Holly Stokes 

     WASHINGTON (MNI) - The March CPI data suggested that consumer 

inflation remains contained, with a tick up in the year/year rates due 

to base factors from a weak March 2017 reading, data released Wednesday 

morning showed. 

--CPI BELOW EXPECTATIONS

     Overall CPI posted a 0.1% decline, below even the pessimistic flat 

reading expected, while core CPI rose 0.2%, as expected. 

     The whisper number for overall CPI was for a 0.2% gain, so today's 

headline result should surprise markets, especially inflation hawks. 

     Unrounded, the month/month rise for overall CPI was -0.063%, on the 

higher side of the 0.1% decline. The unrounded increase for core CPI was 

+0.176%. 

     Forecasts tend to be fairly accurate for CPI, though there have 

been overestimates in recent March reports, particularly in March 2017 

when cell phone prices plunged. Today's data maintain that trend. 

--YEAR/YEAR PRICES JUMP ON BASE EFFECTS

     Overall, the data point to contained core consumer inflation, 

though the year/year rate ticked up above the 2% threshold due to base 

effects from a weak March 2017 reading. 

     The year/year rate for overall CPI accelerated to 2.4% from 2.2% in 

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

A pull back in cell phone plan prices led to a weak reading in March 

2017, which caused base effects that supported the year/year gain the 

current month. 

--CORE MEASURES MIXED, ENERGY DOWN

     The large owners' equivalent rents category was up 0.3%, lodging 

away from home prices rose 2.3% and medical care prices were 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. 

     Energy prices fell by 2.8% in the month after a 0.1% rise in 

February. Gasoline prices fell 4.9% and fuel oil prices fell by 0.7%, 

while electricity prices were flat and natural gas prices fell 1.2%. 

Excluding only energy prices, the March CPI would have been up 0.2%. 

Energy prices were up 7.0% unadjusted, so seasonal adjustment issues 

were at play.  

     Food prices were up 0.1% in March, with food at home and food away 

from home both up 0.1% in the month. 

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

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