March 2018 Consumer Price Index

Prices fell for consumers during March 2018 according to the Bureau of Labor Statistics’ Consumer Price Index.  Versus a month earlier, this popular measure of inflation fell 0.1 percent after rising 0.2 percent in February.  Despite the monthly decline, the year-over-year statistic increased to 2.4 percent from 2.2 percent.

Inflation was less tame than the headline suggested after making a closer examination.  Removing food and energy, core-CPI moved higher by 0.2 percent in the period.  In other words, something away from the core measure caused the headline number to contract.  Additionally, the year-over-year core statistic increased from 1.8 percent to 2.1 percent. 

Gasoline had a significant impact on the overall tally.  The gasoline index collapsed 4.9 percent in the period.  This drop was large enough to more than offset increases in shelter, medical care, and food. 

Core-CPI was over 2.0 percent on a year-over-year basis for the first time since March 2017.  While not the Federal Reserve’s favorite price proxy, it does tend to move similarly to their preferred measure.  However, this indicator spent 16 months above the 2.0 mark starting in November 2015, so this single print is unlikely to create panic in the halls of nation’s central bank.  Nonetheless, the trend for core-CPI has been accelerating, and it must be stimulating some murmurs in the Eccles Building.