por admin » Mar Abr 13, 2021 9:08 am
Consumer prices rise more than expected, pushed by 9.1% jump in gasoline
PUBLISHED TUE, APR 13 20218:30 AM EDTUPDATED TUE, APR 13 202110:03 AM EDT
Jeff Cox
@JEFF.COX.7528
@JEFFCOXCNBCCOM
The consumer price index rose 0.6% in March from the previous month and 2.6% from a year ago, according to the Department of Labor.
That compares to Dow Jones estimates of 0.5% and 2.5% respectively.
A surge in gasoline prices accounted for about half the gain amid signs of an accelerating economic recovery.
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U.S. consumer price index rose 0.6% in March vs 0.5% increase expected
Consumer prices shot higher in March, given a boost by a strong economic recovery and year-over-year comparisons to a time when the Covid-19 pandemic was about to throttle the U.S. economy, the Labor Department reported Tuesday.
The consumer price index rose 0.6% from the previous month but 2.6% from the same period a year ago. The year-over-year gain is the highest since August 2018 and was well above the 1.7% recorded in February.
The index was projected to rise 0.5% on a monthly basis and 2.5% from March 2020, according to Dow Jones estimates.
The report “is the clearest indication so far that the signs of mounting inflation evident in business surveys and producer prices are feeding through to stronger consumer prices,” wrote Michael Pearce, senior U.S. economist at Capital Economics. “For all the focus on supply disruptions pushing goods prices higher, the strongest upward pressure on prices is coming from the services sector.”
Gasoline prices were the biggest contributor to the monthly gain, surging 9.1% in March and responsible for about half the overall CPI increase. Gasoline is up 22.5% from a year ago, part of a 13.2% increase in energy prices.
Food nudged higher as well, up 0.1% for the month and 3.5% for the year. The food-at-home category increased 3.3%. All six of the government’s measures of grocery store indexes rose, with the biggest gain of 5.4% in the category of meats, poultry, fish and eggs.
Food away from home increased 3.7%, while “limited services meals,” which include pickup, take out and delivery restaurants, jumped 6.5% for the year, the largest annual increase in the survey’s history dating to 1997.
Markets showed a modest reaction to the news, with stock futures off their lows for the morning but still indicating a negative open. Government bond yields held mostly flat.
That big surge on a year-over-year basis resulted from what economists call the “base effect,” or the lower level used for comparison. In March 2020, the government had just begun a massive shutdown of U.S. businesses that ultimately would see more than 22 million Americans on the unemployment line.
Core CPI, which excludes volatile food and energy costs, increased 0.3% monthly and 1.6% year over year.
While the inflation numbers look high, many economists as well as policymakers at the Federal Reserve expect the increase to be temporary. April likely also will show a sharp rise, but then the numbers are supposed to decrease as the worst months of the shutdown fall out of the data comparisons.
Fed officials have said they won’t adjust policy based on short-term jumps in inflation readings. Chairman Jerome Powell told CBS’ “60 Minutes” in an interview that aired Sunday evening that he does not expect any interest rate hikes this year.
Still, markets have been pricing in higher growth and inflation, with government bond yields rising to their highest levels since before the pandemic. The economic reopening and unprecedented levels of government support are contributing to the inflationary environment.
Fed officials see GDP growth this year around 6.5%, which would be the fastest increase since 1984.