US CPI Rise Lower than Expected in March

U.S. consumer prices rose less than expected in March and underlying inflation slowed, suggesting the Federal Reserve will remain cautious about raising interest rates this year.

Other data on Thursday showed the number of Americans filing for unemployment benefits fell last week, revisiting a level last seen in 1973, showing sustained strength in the labor market.

The Labor Department said its Consumer Price Index gained 0.1 percent last month as a rebound in gasoline prices was partly offset by a drop in the cost of food. There were also slow-downs in medical care and housing costs.

The CPI fell 0.2 percent in February. In the 12 months through March, the CPI increased 0.9 percent after advancing 1.0 percent in February. Economists had forecast the CPI gaining 0.2 percent last month and rising 1.1 percent from a year ago.

The so-called core CPI, which strips out food and energy costs, inched up 0.1 percent. That was smallest increase since August and followed a 0.3 percent increase in February. In the 12 months through March, the core CPI rose 2.2 percent after gaining 2.3 percent in February.

The Fed has a 2 percent inflation target and tracks an inflation measure which is running below the core CPI.

via Reuters

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza