Inflation Is So Back
At the start of the year, it looked like America’s fight with inflation was finally coming to an end.
Not so fast.
Consumer prices rose 0.4 percent in March and the annual inflation rate ticked up to 3.5 percent, according to data released Wednesday morning by the Department of Labor. So-called “core inflation,” which filters out the more volatile categories like food and energy prices, also jumped 0.4 percent in the past month and has climbed by 3.8 percent since a year ago. Both figures rang in higher than expected.
Inflation remains well below the shockingly high levels reached in 2022—when it peaked above 9 percent—but the past two months have been a worrying reversal. March’s annual inflation figure of 3.5 percent is the highest mark since September.
Prices had increased by no more than 0.2 percent in October through December. A small jump in January was waved away as an “anomaly” by some analysts, but that no longer appears to be the case.
The new data released Wednesday “are not kind to the thesis that January was a seasonal anomaly,” Jason Furman, the Harvard economist and former White House economic advisor under President Barack Obama, wrote on X (formerly Twitter). “The issue is services inflation has been unrelenting, much of that shelter.”
Indeed, prices for shelter—a category that includes rental housing, but also things like hotel room prices—are up 5.7 percent over the past year. But other aspects of the service sector are also playing a role in inflation’s rebound too. Prices in that category rose by 0.5 percent in March and are up 5.4 percent over the past year, likely reflecting rising wages.
As The Washington Post‘s Heather Long pointed out on X, vehicle costs are particularly high right now—a significant factor for many American households, since 90 percent own at least one car. Insurance costs are up 22 percent in the past year, while car repair prices have surged by more than 11 percent.
While the most important im
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