Ending Soon! Save 33% on All Access

CPI Report: Inflation Rose More Than Expected in March, Driven By Housing and Energy Costs The average U.S. household is paying $227 more per month for goods compared to one year ago.

By Sherin Shibu

Key Takeaways

  • The U.S. Bureau of Labor Statistics recorded an annual inflation rate of 3.5% for March.
  • That's an increase from the 3.2% inflation rate recorded in February and higher than the Federal Reserve's target of 2%.

The U.S. consumer price index, which measures the cost of goods and services, increased faster than expected in March at an annual inflation rate of 3.5%, according to a March CPI report released by the Bureau of Labor Statistics (BLS) on Wednesday.

The prices for necessities have gone up, with the average U.S. household paying $227 more per month for goods compared to one year ago.

The annual inflation rate recorded in February was lower, at 3.2%.

The agency attributed more than half of the monthly increase in inflation to rising energy and housing prices. Housing costs rose 5.7% from last year, while gasoline rose 1.7% (or 6.4% before seasonal adjustments).

Transportation services rose the highest out of all categories, at a 10.7% year-over-year increase.

Related: More Than Half of Americans Are Now Living Paycheck to Paycheck

Shelter costs are weighed as one-third of the CPI; CNBC reports that the expectations for costs in that category to decrease throughout the year have been crucial to possible interest rate cuts.

Food prices also increased, according to the CPI, but not across the board: Meats, poultry, fish, and eggs prices rose 0.9% over the year, while fruit and vegetable prices rose 2%.

Dairy product prices dropped 1.9% over the same period.

Related: Cardi B Goes On Rant Slamming Grocery Prices, Inflation

Meanwhile, a separate BLS real earnings summary from March shows that average hourly earnings for workers increased by just 0.6% in the past year.

U.S. households are spending more than a thousand dollars more on goods per month on average than they did three years ago, according to ABC News.

Will the Federal Reserve Cut Interest Rates?

The CPI report decreases the chance that the Federal Reserve will cut interest rates in June.

Economist Paul Ashworth of Capital Economics wrote to clients in a note obtained by USA TODAY that the rise in inflation "pretty much kills off hopes of a June rate cut."

Related: Americans Aren't Saving Money Right Now — and It's Not Just Because of Inflation

"That means mortgage rates, car loans, those credit card APRs, they all stay higher for longer," ABC News' Rebecca Jarvis stated.

Inflation has decreased from its 9.1% peak in June 2022 but is still above the Fed's target of 2%.

Sherin Shibu

Entrepreneur Staff

News Reporter

Sherin Shibu is a business news reporter at Entrepreneur.com. She previously worked for PCMag, Business Insider, The Messenger, and ZDNET as a reporter and copyeditor. Her areas of coverage encompass tech, business, strategy, finance, and even space. She is a Columbia University graduate.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Business News

'Creators Left So Much Money on the Table': Kickstarter's CEO Reveals the Story Behind the Company's Biggest Changes in 15 Years

In an interview with Entrepreneur, Kickstarter CEO Everette Taylor explains the decision-making behind the changes, how he approaches leading Kickstarter, and his advice for future CEOs.

Business Ideas

87 Service Business Ideas to Start Today

Get started in this growing industry, with options that range from IT consulting to childcare.

Business Models

How to Become an AI-Centric Business (and Why It's Crucial for Long-Term Success)

Learn the essential steps to integrate AI at the core of your operations and stay competitive in an ever-evolving landscape.


5 Steps to Preparing an Engaging Industry Presentation

You can make a great impression and generate interest with an exciting, informative presentation. Find out my five secrets to creating an industry presentation guaranteed to wow.