The cost of living in America rose at a steady pace in March, with the Consumer Price Index for All Urban Consumers (CPI-U) increasing 0.4% on a seasonally adjusted basis, matching February's uptick. Over the past year, prices have climbed 3.5% before seasonal adjustment, outpacing February's 3.2% annual inflation rate.
The main drivers behind March's increase were shelter and gasoline costs, which together accounted for more than half of the overall rise in the index. The energy index jumped 1.1% in March, while the gasoline index surged 1.7%. Consumers felt the sting at the pump, with gasoline prices spiking 6.4% before seasonal adjustment.
Shelter costs, which include rent and owners' equivalent rent, rose 0.4% for the month and are up 5.7% compared to a year ago. Stubbornly high housing expenses have been a key factor fueling inflation, accounting for over 60% of the total increase in core CPI (excluding food and energy) over the past 12 months.
While overall food prices inched up just 0.1% in March, dining out is putting a bigger dent in Americans' wallets. The food away from home index, which covers restaurant meals, rose 0.3% for the month and is up 4.2% over the past year. Grocery prices were flat overall, although some categories saw significant swings - egg prices jumped 4.6% in March, while cereal and bakery products had their largest monthly drop on record, sliding 0.9%.
Underneath the headline numbers, price pressures remain widespread. The index for all items less food and energy, seen as a clearer gauge of underlying inflation, climbed 0.4% in March, continuing an unwelcome trend. Motor vehicle insurance soared 2.6% for the month and is up a staggering 22.2% over the past year. Medical care, recreation, and personal care costs are also markedly higher than a year ago.
A few bright spots emerged amid the inflationary gloom. Used car and truck prices fell 1.1% in March after rising in February. Airline fares, recreation, and new vehicle prices also edged lower for the month. However, any relief for consumers seems fleeting as inflation proves stubborn despite aggressive interest rate hikes by the Federal Reserve over the past year.
With the annual inflation rate accelerating to 3.5% from February's 3.2% pace, Americans are left wondering when they'll feel more reprieve in their budgets. The March CPI report suggests that day may still be a ways off, as the rising cost of living maintains its grip on the economy.