US inflation at 5%, the lowest it has been since 2021
US annual inflation reduced to 5% last month, official figures reveal, the slowest pace for price increases since 2021 they first began to climb.
March’s monthly consumer price index (CPI), which measures the price of a basket of goods and services, showed the rate easing off over the last year. In February, the annual inflation figure stood at 6%, already a steep decline from its peak of 9.1% in June.
But core inflation, which does not include volatile energy and food prices, has remained steady – a sign that the slowing pace could be attributed to comparisons against soaring gas prices a year ago, near the beginning of Russia’s invasion of Ukraine. March’s core inflation rate over the last year was 5.6%, compared with February’s 5.5%.
Housing is the largest contributing factor to price increases over the last few months, rising 0.4% over the last month with an 8.2% rise over the last year. The uptick in housing prices offsets the impact that decreasing energy prices, which went down 6.4% over the last year, have had on the overall inflation rate. Food prices remained stable in March, with no changes over the last month.
Despite the overall cooling, the closely watched inflation report will probably not sway officials at the Federal Reserve, who have been eyeing further interest rate hikes in their aggressive campaign to lower inflation.
Even as the overall inflation rate is on a downward trend, economists are expecting the Fed to continue raising interest rates, despite the volatility increased rates could bring to the economy. In March, the Fed increased rates by a quarter point to a range of 4.75% to 5%, a move largely seen as both assertive and conciliatory in the direct aftermath of the collapse of Silicon Valley Bank
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