- ORIGINAL NEWS
Here’s the inflation breakdown for March 2024 — in one chart
- SUMMARY
In March 2024, the cost of everyday items continued to rise, with the consumer price index (CPI) jumping by 3.5% compared to the previous year.
This uptick is largely driven by persistent housing inflation and rising gasoline prices.
Despite a decrease from the peak inflation rate of 9.1% experienced in 2022, CPI remains stubbornly high, exceeding the Federal Reserve’s target of around 2%.
The main contributor to this ongoing inflation is the high cost of housing, which accounts for the largest portion of CPI.
Although inflation has not surged significantly, progress towards bringing it back to the desired level has stalled.
Economists note that underlying inflation, excluding the volatile costs of shelter, has returned to the target.
However, the continued pressure from housing inflation is preventing overall inflation from easing as quickly as hoped.
On the positive side, household buying power has improved over the past year thanks to wage growth outpacing inflation.
Average hourly earnings have increased in real terms, meaning workers are earning more in purchasing power despite rising prices.
Gas prices have also risen since February, influenced by higher oil prices, positive economic outlooks, and supply control among oil producers.
Concerns exist that this upward trend may continue, negatively impacting consumer purchasing power and sentiment.
As with past inflation episodes, supply-and-demand imbalances play a significant role.
The pandemic disrupted supply chains for goods, while increased demand for physical goods and services put upward pressure on prices.
The labor market’s dynamics have also contributed to inflation, with higher wages driving up the cost of services.
Given that supply chain issues are largely resolved, economists anticipate that disinflation will primarily come from the services sector, with housing being a key factor.
However, despite expectations and some improvements in rental lease prices, housing inflation remains high, delaying the expected decline in inflation readings.
- NEWS SENTIMENT CHECK
- Overall sentiment:
neutral
Positive
“Household buying power is also up over the past year as wage growth has outstripped inflation.”
“The average worker’s “real” hourly earnings — their pay after accounting for inflation — increased 0.6% from March 2023 to March 2024.”
Negative
“The consumer price index, a key inflation gauge, rose 3.5% in March from a year ago, the U.S. Labor Department reported Wednesday.”
“Inflation jumped in March as prices for consumer staples like gasoline edged higher and those for housing remain stubbornly high, suggesting inflation may be a bit stickier than seemed just a few months ago, economists said.”