Core CPI also softer than expected
By Greg Robb, MarketWatch
WASHINGTON (MarketWatch) — Consumer inflation decelerated in March as gasoline prices dropped, in data which could add to fears of renewed deflationary pressure in the economy.
The consumer price index decreased 0.2% in March, led by lower energy and apparel costs, the Labor Department said Tuesday.
The decrease was larger than the 0.1% decline expected by analysts.
Core prices — which exclude volatile food and energy costs — increased 0.1%, softer than the 0.2% gain expected by economists surveyed by MarketWatch. See comprehensive MarketWatch calendar.
Energy prices decreased 2.6% in March, retracing half of the 5.4% rise in February. Gasoline prices fell 4.4% in the month. Electricity prices also declined.
Commodity prices have been under pressure this week due to concerns that the global economy is slowing down. The lower prices have sparked some concern of deflation, or falling prices.
Food prices were flat in March, led by a drop in dairy prices.
Apparel prices fell 1%, the largest drop since April 2001.
The only big gain came in prices for used cars and trucks.
In the past year, the CPI has risen 1.5% — the slowest year-over-year growth since July. The core CPI has gained 1.9%.
Income growth picked up slightly. Real weekly earnings rose 0.5% in March, the government said in a separate report Tuesday. In the past year, real weekly earnings are up 0.6%, while real hourly earnings have risen 0.3%.
Details
In March, shelter costs increased 0.2% for the third month in a row.
The index for medical care rose 0.3%, its largest increase since July.
The index for airline fares rose 0.6%, after declining 0.3% in the prior month.
Furniture prices fell 0.3%, the third drop in the last four months.
In a separate report, the Commerce Department said housing starts jumped 7% in March. Read more on housing starts.
Greg Robb is a senior reporter for MarketWatch in Washington. Follow him on Twitter @grobb2000.
