CPI Data’s Out Colder Than February
Consumer prices in March 2023 rose 5.0% YoY, decelerating a full percentage point from February’s 6.0% and falling short of the expected 5.2% increase. This month’s CPI report recorded the smallest 12-month increase since May 2021.
On a month-over-month basis, the Consumer Price Index (CPI) only increased 0.1%, less than the 0.3% expected and 0.4% in the prior month.
In the monthly increase, shelter prices were the largest contributor, more than offsetting the 3.5% decline in the energy index. The food index was unchanged, with the food at home index dropping 0.3%.
Core CPI, which excludes volatile food and energy prices, rose 0.4% M/M, in line with the 0.4% expected but down from +0.5% in February.
On a year-over-year basis, core CPI increased by 5.6% vs. the expected 5.6% and the prior 5.5%.
“The March inflation report confirms that the disinflationary process has ended, with the core CPI for March at 5.6% exceeding the February CPI at 5.5%,” said SA contributor Damir Tokic. “The Fed will be forced to continue to hike, despite the slowing economy, which supports the bearish thesis for stock market.”
In the core CPI monthly change, prices that increased were shelter, motor vehicle insurance, airline fares, household furnishings and operations, and new vehicles. Medical care and used cars and trucks were the only categories that declined during the month.
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