United States: Inflation falls for third consecutive month in March
April 14, 2016
In March, seasonally-adjusted consumer prices increased 0.1% over the previous month, which contrasted the 0.2% decrease observed in February, but fell short of the 0.2% increase the markets had expected. The monthly increase was result of higher energy prices, but downward pressure came from a drop in food prices.
Inflation edged down from 1.0% in February to 0.9% in March, which marked a second consecutive drop after inflation reached a 15-month high in December. Annual average inflation inched up from 0.3% in February to 0.4% in March—a seven-month high.
Core consumer prices, which do not consider foodstuff and energy prices, rose 0.1% in March over the previous month, which followed the 0.3% increase tallied in February. The result also fell short of the 0.2% increase the markets had expected. Core inflation inched down from 2.3% in February to 2.2% in March.
Although the Federal Reserve targets an alternative measure of inflation—called the personal consumption expenditures price index—it is likely that, in the April monetary policy meeting, U.S. monetary authorities will closely watch recent developments in consumer prices.
Author: Ricardo Aceves, Senior Economist