Inflation shows strongest annual gain since early 2017

  • Inflation shows strongest annual gain since early 2017

Inflation shows strongest annual gain since early 2017

Core consumer prices, which strip out volatile items like fresh food and energy, rose by 2 per cent Y/Y versus 2.5 per cent in February.

Annual inflation is rising as the weak readings from past year drop from the calculation.

Over the last 12 months, inflation is running at a rate of 2.4 percent.

The drop owed entirely to a temporary decline in gasoline prices.

That's the largest 12-month increase since March 2017 and higher than the 1.6 percent average annual rate over the past 10 years.

Core U.S. inflation rose at the fastest pace in a year in March, confirming the view of some economists that the Federal Reserve will raise interest rates four times this year.

The prices of housing, water, electricity, gas and other fuels, which have the second-largest weight of 13.6%, edged down 0.97% year-on-year in March after rising by 0.98% in February. Prices for fish, fish products, butter, bread, pasta, cheese, rice, meat and meat products grew by 1.6%-0.8%.

US consumer prices rose 2.4 percent in March from a year earlier, the fastest annual pace in 12 months.

The CPI increased y/y in all sectors, except in the health sector, where it was flat.

Analysts polled by Reuters had expected March producer inflation would moderate slightly to 3.2 percent.

Economists had forecast the CPI unchanged in March and the core CPI rising 0.2 per cent.

In line with the central bank's assessments, annual inflation is expected to hover around 2.2% in 2018 and converge to the central bank's target in 2019. That likely accounted for the big jump in the annual inflation rate last month. Their inflation-adjusted hourly earnings rose 0.4% while the length of the number of hours per week they worked was unchanged.

Healthcare costs increased 0.4 per cent, with prices for hospital care shooting up 0.6 per cent and the cost of doctor visits rising 0.2 per cent. Apparel prices fell 0.6 per cent after two straight months of robust increases.

Inflation based on the Harmonized Index of Consumer prices increased 0.8 percent yearly in March, just above the 0.7 percent rise in February.

The annual rate was well below the 2.9% level reported in February and forecasts for a smaller decrease to 2.6%. There were also declines in the cost of telecommunication, used cars and trucks, tobacco and education.