PHOTO BY WIFESUN – STOCK.ADOBE.COMInflation in the United States eased to 5% in March, its lowest level in almost two years, but underlying price pressures remained high, according to the The Wall Street Journal.
The Labor Department’s consumer-price index measures what the public pays for goods and services. Inflation remains elevated above the 2.1% average from the three years before the pandemic and the government’s 2% target.
Core prices that exclude volatile energy and food categories have eased more slowly than overall prices partially because of inflationary pressure from shelter costs, The Wall Street Journal reported. The newspaper also said economists see these core prices as good predictors of future inflation.
Economists surveyed by The Wall Street Journal estimated that overall prices rose 5.1% in March from a year earlier and that core prices increased 5.6% during the same period. Overall prices rose 0.2% in March from the prior month and core prices were up 0.4%.
To cool the economy and tame inflation, the Federal Reserve has raised interest rates nine times in the past year. Officials in March raised the benchmark federal-funds rate by a quarter percentage point, bringing it to a range between 4.75% and 5%. The Fed is scheduled to meet during the first week of May to discuss its next move.
The International Monetary Fund estimates that tighter lending following the two recent midsized bank failures will slow U.S. economic growth. The economy started the year on a strong note but has shown signs of slowing.
The labor market also cooled in March with hiring gains moderating and wage growth easing. Weekly jobless claims that are seen as a proxy for layoffs were up from previous lows and job openings have dropped so demand for workers is easing. Consumer spending rose modestly in February.
