Consumer prices in the United States rose by 3.5% from a year ago in March, surpassing economists’ expectations and indicating a notable acceleration in inflation. The latest data, released by the Labor Department’s Bureau of Labor Statistics on Wednesday showed the growing costs of goods and services across the economy.
The consumer price index (CPI), climbed 0.4% for the month, driving the 12-month inflation rate to 3.5%. This increase, 0.3 percentage points higher than February, came as a shock to many analysts who had anticipated a more modest gain.
Shelter and energy costs played a significant role in driving the inflationary pressure. Energy prices surged by 1.1%, following a 2.3% increase in February, while shelter costs, which constitute about one-third of the weighting in the CPI, rose by 0.4% on the month and spiked by 5.7% from a year ago.
The unexpected rise in inflation rattled financial markets, with stocks experiencing a slump and Treasury yields witnessing a notable spike. Concerns about the impact of rising prices on consumer purchasing power and overall economic stability weighed heavily on investor sentiment.
Despite some sectors experiencing moderation, such as food prices increasing by just 0.1% on the month, other categories saw notable fluctuations. Prices for meat, fish, poultry, and eggs jumped by 0.9%, driven by a substantial 4.6% surge in egg prices. Additionally, used vehicle prices fell by 1.1%, while medical care services prices rose by 0.6%.
The report also highlighted the challenges facing workers, as real average hourly earnings remained flat on the month and increased by a mere 0.6% over the past year. This stagnation in wage growth, coupled with rising inflation, presents a concerning economic outlook for many households.
