U.S. March CPI 3.3%; gasoline spikes 21.9%

The Bureau of Labor Statistics reported U.S. consumer prices for March held at a 3.3% year-on-year pace. Headline CPI rose 0.9% for the month, leaving the annual rate unchanged from the prior reading.

The report showed a sharp energy-driven move. The energy index climbed 10.2% month-to-month and gasoline surged 21.9%—the largest monthly increase on record for the gasoline series. On a non-seasonally adjusted basis, the unrounded monthly change was 1.05%, up from 0.47% in the prior report. Gasoline prices remain roughly 40% above pre-war levels.

Core CPI, which excludes food and energy, increased 0.2% for the second straight month and stood at 2.6% year-on-year, slightly below consensus estimates of 2.7%. A supercore measure that strips out food, energy and shelter rose 0.18% month-to-month, down from 0.35% in February. The supercore year-on-year rate moved to about 3.14% from roughly 2.75% previously.

Shelter costs account for about one-third of the CPI basket. The BLS methodology reflects lease renewals with a lag, which has slowed the pass-through of falling market rents into the official shelter measure. Private-sector rent indicators have shown cooling for more than a year, while the BLS shelter series has declined more slowly.

Real weekly earnings fell 0.9% in the March report, compared with a 0.1% rise in the prior period, reducing household purchasing power once inflation is taken into account.

Economists had largely anticipated the energy spike amid higher crude prices tied to conflict in the Middle East. Financial-market indicators showed no Federal Reserve rate cuts priced for this year, and the U.S. dollar weakened modestly after the release before mostly retracing; analysts linked the initial dollar move to the slightly lower-than-expected core reading.

Headline CPI peaked above 9% in mid-2022 and moved below 3% by late 2024 following policy tightening. The March data combined a large, volatile energy impulse that pushed headline inflation up with a quieter underlying core trend.