The U.S. Bureau of Labor Statistics reported today that the Consumer Price Index for All Urban Consumers, the most common measure of inflation, increased by 0.1% in March on a seasonally adjusted basis, after rising 0.4% in February.
Over the last 12 months, the all items index increased by 5.0% before seasonal adjustment.
The shelter index was the largest contributor to the monthly increase in all items, more than offsetting a 3.5% decline in the energy index. The food index remained unchanged in March, with the food at home index falling by 0.3%.
The index for all items less food and energy increased by 0.4% in March, after rising 0.5% in February. Indexes that increased in March include shelter, motor vehicle insurance, airline fares, household furnishings and operations, and new vehicles. The medical care index and the index for used cars and trucks were among those that decreased over the month.
The all items index increased by 5.0% for the 12 months ending in March, marking the smallest 12-month increase since the period ending in May 2021. The all items less food and energy index rose by 5.6% over the last 12 months, while the energy index decreased by 6.4% for the same period. The food index increased by 8.5% over the last year.
The food at home index fell by 0.3% in March, with three of the six major grocery store food group indexes decreasing over the month. The energy index dropped by 3.5% in March, primarily due to a 4.6% decrease in the gasoline index.
Over the last 12 months, the shelter index increased by 8.2%, accounting for over 60% of the total increase in all items less food and energy. Other indexes with notable increases over the last year include motor vehicle insurance (+15.0%), household furnishings and operations (+5.6%), recreation (+4.8%), and new vehicles (+6.1%).
To put U.S. inflation in perspective: an individual making $50,000 per year in January 2020 would now have to make $58,500 per year in order to retain the same buying power.
Although inflation is slowing — thanks in part to the Federal Reserve hiking interest rates — wages are not growing as fast as prices are increasing. In March, U.S. workers saw the 24th consecutive month of a decline in inflation adjusted wages.