Consumer Price Index Rises Only Slightly

Slowing in shelter prices put the brakes on core consumer prices which, according to the Bureau of Labor Statistics, are no longer on a gradual path of acceleration. The core, which excludes food and energy, rose only 0.1 percent in March following two solid back-to-back gains of 0.3 percent. Year-on-year, the core is moving in the wrong direction, down 1 tenth to a 2.2 percent reading that justifies Janet Yellen's doubts whether inflation, not getting much lift from wages, will show much traction this year. The overall CPI, held down by food, also inched 0.1 percent higher in another disappointing reading. Year-on-year, the CPI is up only 0.9 percent and is also moving in the wrong direction, down 1 tenth from February. The ongoing rise in oil prices is coming at a good time for the inflation outlook and should help give a boost to future readings. But March's results are very likely to push back expectations for the next Federal Reserve rate hike.

Recent History Of This Indicator:
Boosted by March's sharp jump in gasoline prices, consumer prices are expected to rise a welcome 0.2 percent. But the core rate, which excludes energy and also food, is also expected to show strength, also at a consensus of plus 0.2 percent. Traction for service prices in this report has been leading the core higher including higher costs for medical care and for housing. Momentum in this report has been clearly upward but, for the total inflation picture, has yet to be combined by increases in wages which remained flat.