Core US consumer prices rose less than expected in March, closely watched data out Tuesday showed.
It was a rare and, some would argue, mostly meaningless win for anyone still clinging to the notion that price pressures are poised to abate sooner rather than later.
The core gauge rose 0.3% MoM, the BLS said (figure below). That was cooler than the 0.5% increase economists saw. It was also the slowest monthly core gain since September.
The headline gauge merely matched estimates, rising 1.2%. It could’ve been worse.
Needless to say, the YoY prints on both headline and core remain extraordinarily high and wholly inconsistent with anyone’s definition of price stability in an advanced economy.
Headline consumer prices rose 8.5% YoY last month, a tick higher than the 8.4% economists expected. Core prices rose 6.5%, slightly below the 6.6% forecasted gain (figure below).
The gain on the headline index was the largest since December 1981. On the core gauge, March’s 12-month increase was the most dramatic since August of 1982.
The breakdown showed food prices continuing to rise at an unsettling pace. The headline food gauge rose 1% MoM. The index has risen at least 0.9% sequentially in five of the last seven months.
Food at home prices rose 1.5%, continuing along their upward trajectory (figure above). The UN’s food gauge jumped to a record high last month as the conflict in Ukraine disrupted supplies from “Europe’s breadbasket.”
All six major grocery store food group indexes increased in March. At 10%, the 12-month increase in the food at home index was the largest in 41 years.
Not surprisingly, the energy indexes accelerated dramatically. The monthly readings were alarming, as much as something that was wholly predictable can be alarming. The broad energy index rose 11% (figure below).
That was among the largest monthly increases on record.
The YoY print on the headline energy gauge was 32%. Every major component rose. The gasoline index was up almost 50% YoY and the natural gas gauge almost 22%. Electricity prices were 11% higher.
Notably, used cars were down 3.8%, the second straight drop. The rent was higher. Again.
All in all, the report was bad. It’s very difficult to suggest otherwise. At the risk of trafficking in “macro doom” (as one Bloomberg opinion columnist called it on Monday), I’ll provide a bit more color in a companion article later Tuesday.
For markets, the cooler-than-expected core print was something of a relief. It’s entirely possible the second quarter will be defined by receding core prices juxtaposed with elevated headline prints. You could argue, if you were so inclined, that March’s report was just as bad as expected, but no worse. These days, that counts as a “win.”
