The March consumer price index rose 0.3% and core increased 0.2%, about as private analysts anticipated.

Core had offsetting moves, with new vehicles down 0.1% and a 1.3% decline in apparel, but drugs up 0.4%, a rise in local phone service of 0.5%, tuition up 0.4%, and an increase in airfares of 3.0%. Owners’ equivalent rent rose 0.2%.

Apparel prices were lower for a second month, but the drop reflected severe seasonal adjustment. Prior to the adjustment, apparel prices rose 2.6%.

The Bureau of Labor Statistics said this reflected “the continued introduction of spring-summer wear” and pointed out that prices for women’s and girls’ apparel had the largest advance of 4.0% prior to adjustment.

It is possible that the early Easter and cold spring season caused some problems with the apparel adjustments this year. Without apparel, core CPI still would have barely made a 0.2% increase, however.

Food rose 0.2% as pork and fruit prices fell but meats and vegetables rose. Energy increased 1.9% as all categories rose. Gasoline prices could drop in April, the bureau said.

Over-the-year CPI increased 4.0% but core is 2.4%, both far less than the rises in the producer price index, illustrating that some of the recent cost rises are being by companies.

CPI still is not moving lower as fast as it should in a recession, but its magnitude of change is less worrisome than that of raw materials prices. Moreover, if energy prices fall, CPI should soon retreat.

— Market News International

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