Consumer inflation in the US remained persistently high last month, driven by factors such as gas, rents, and auto insurance. The Federal Reserve may reconsider its plans to cut interest rates as a result of this report.
WASHINGTON — Consumer inflation remained persistently high last month, boosted by gas, rents, auto insurance and other items, the government said Wednesday in a report that will likely give pause to the Federal Reserve as it considers how many — or even whether — to cut interest rates this year.
Overall consumer prices rose 0.4% from February to March, the same as in the previous month. Compared with a year ago, prices rose 3.5%, up from a year-over-year figure of 3.2% in February.“My agenda is lowering costs for prescription drugs, health care, student debt and hidden junk fees,” Biden said in a statement.
The chronically elevated inflation so far this year does suggest that American consumers, on average, remain confident enough to keep spending despite steady price increases, said Laura Rosner-Warburton, senior economist at MacroPolicy Perspectives, a consulting firm. Likewise, she said, the surge in auto insurance and repair costs reflect the previous sharp increases in auto sales prices.“It means that the consumer’s in good shape and accepting price increases still,” Rosner-Warburton said.
Chubbs said the beneficiaries typically live paycheck-to-paycheck and are vulnerable to any sharp change in their financial circumstances. Most are still struggling to recover from the jump in costs over the past three years, including in rents, child care and car ownership — practically a necessity in a region with limited public transportation.
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