The U.S. March consumer price index showed moderation due to lower energy prices and after accounting for an 11% hike in tobacco prices that reflected new excise taxes.

March CPI was a better-than-expected down 0.1% and core was up 0.2%, marking its third monthly 0.2 point gain. Overall CPI fell 0.4% over the year in its first decline since a similar lower 0.4% in 1955; core CPI was up 1.8% over the year.

Unrounded core CPI was up 0.1709%.

Core was boosted by an increase of 11.0% in tobacco (accounting for 60% of the core gain), a gain of 0.6% in new vehicles, and a gain of 0.2% in medical care (where drugs, services and commodities all gained 0.2%).

Owners equivalent rent was up 0.2%. Apparel was lower 0.2% but was higher 3.1%  prior to seasonal adjustment, reflecting the expected lines of new spring clothes.

Food prices declined 0.1% as meats and dairy fell. Energy was down 3.0% after gaining 3.3% in February, as all areas dropped, led by a drop of 8.5% for fuel oil.

In addition, an economist at the Bureau of Labor Statistics indicated it is likely the overall CPI would return next month to a positive rate of growth on an over-the-year basis.

—Market News International

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