CUNA Senior Economist Dawit Kebede issued the following statement in response to the Labor Department’s March Consumer Price Index Report:
“Consumer prices increased by 0.1% in March and 5% over the last 12 months. This is a big drop in one month, 6% in February, and the lowest reading since May 2021. Prices decreased for food, energy, used cars, and medical services. On the other hand, increases in transportation services, new cars, and housing prices offset the decline in other items. The index for housing, a lagging indicator, still continues to contribute the most to the monthly increase but its growth slowed in March. It is expected to slow down even further in the coming months.
“Overall, this is encouraging news for the Federal Reserve fighting to bring inflation down to 2% target. There are some underlying price pressures driven by consumer spending. Core-service prices excluding shelter, which the Federal Reserve watches closely, decreased in recent months but remains at 4%.
“Tight credit conditions after bank failures and high interest rates are expected to slow down spending and result in further cooling down of prices in the coming months.”