(Newly released federal inflation data showed consumer prices continued to rise at an elevated rate for yet another month, signaling that inflation’s rise may not be over after all.
The U.S. Bureau of Labor Statistics on Wednesday released its Consumer Price Index, a key marker of inflation, which showed prices rose 0.4% in March. Upticks in gasoline and shelter were major parts of the overall increase.
The announcement not only flew against the Biden administration’s efforts to gaslight voters into thinking the president’s economic policies were succeeding, but also had a ripple effect of convincing many that the Federal Reserve’s plans to cut interest rates would likely be forestalled.
That, in turn, broke a recent bull market on Wall Street as stocks—including the blue-chip Nvidia and the popular “DJT” stock in Trump Media and Technology Group—faced the prospect of 401(k)-wrecking course corrections.
Over the last 12 months, consumer prices have risen 3.5%, according to BLS, an increase from the 12-month average released in last month’s data.
“The energy index rose 1.1 percent over the month. The food index rose 0.1 percent in March,” BLS said. “The food at home index was unchanged, while the food away from home index rose 0.3 percent over the month.”
Experts raised the alarm after the data’s release.
“Core CPI coming in very hot for the third month in the row,” tweeted Jason Furman, a Harvard professor and former economic advisor during the Obama administration, in a six-tweet thread analyzing the latest figures.
“The numbers are not kind to the thesis that January was a seasonal anomaly,” he added.
Core CPI coming in very hot for the third month in the row. The numbers are not kind to the thesis that January was a seasonal anomaly.
12 months: 3.5%
6 months: 3.2%
3 months: 4.6%
1 month: 4.6% pic.twitter.com/3pVt2h1VMG— Jason Furman (@jasonfurman) April 10, 2024
Furman said he was perplexed by any who believed the Fed would be cutting rates within the next two month as some had projected previously.
Job growth—propped up artificially by government hiring and subsidies for the health-care industry—once again came in with projected estimates that were higher than expected, although they are likely to be revised downward when the actual data arrives, as many have been.
Nonetheless, Furman said the employment data, paired with the increased prices, laid out a clear argument for the Fed to stay the course on rates as government spending continued to leave the overall health of the U.S. economy in limbo.
“The labor market data is screaming a cut isn’t needed for one side of the mandate,” Furman said. “And the price data is screaming that it could be dangerous for the other side of the mandate.”
Overall it is a mystery to me why anyone thinks the Fed might cut rates in June. The labor market data is screaming a cut isn't needed for one side of the mandate. And the price data is screaming that it could be dangerous for the other side of the mandate.
— Jason Furman (@jasonfurman) April 10, 2024
Although prices increased overall, changes varied across different goods and services.
“Indexes which increased in March include shelter, motor vehicle insurance, medical care, apparel, and personal care,” BLS said. “The indexes for used cars and trucks, recreation, and new vehicles were among those that decreased over the month.”
While overall food prices remained largely steady, some items became more expensive, due in part to the present and expected supply-chain shortages from a recent wave of bird flu, which also impacts other livestock, as well as humans.
That could hit even harder in the summer months, sending grocery prices soaring once again, even as global instability threatens to send gas prices on the rise.
“The index for meats, poultry, fish, and eggs rose 0.9 percent in March, as the index for eggs rose 4.6 percent over the month,” BLS said. “The nonalcoholic beverages index also increased in March, rising 0.3 percent. The index for fruits and vegetables increased 0.1 percent over the month.”
President Joe Biden has repeatedly taken fire for the spike in prices since he took office. After Wednesday’s data was released, Republicans blasted him again.
“Under President Biden’s failed Bidenomics agenda, inflation has skyrocketed by 19.4% since he took office,” Sen. Rick Scott, R-Fla., said in a statement.
“Prices keep climbing, and wages can’t keep up. That’s why I have been fighting every day to stop Democrats from doubling down on the reckless spending that got us here in the first place,” Scott continued. “As someone who grew up in public housing and watched my mom struggle to pay the bills, I know how devastating inflation is for families like mine growing up.”
Headline USA’s Ben Sellers contributed to this report.
