The most recent inflation report in the United States showed that prices of goods and services registered an increase of 3.3% in Marchcompared to the previous year. The data represents a strong rebound compared to the 2.4% recorded in February, in a context marked by the rise in energy prices during the month, a reflection of the conflict with Iran which, until a few days ago, began a ceasefire truce with the United States.
The Bureau of Labor Statistics (BLS) noted that, In monthly terms, the Consumer Price Index (CPI) increased 0.9% during Marchafter having registered an increase of 0.3% in February.
For its part, core inflationwhich excludes the most volatile prices such as food and energy, stood at an annual rate of 2.6%while the monthly increase was 0.2%. The contrast when integrating energy price data and its absence is enormous.
And it’s no wonder, The energy index soared 10.9% in March, the largest monthly increase since 2005driven mainly by a 21.2% increase in gasolinethat alone accounted for nearly three-quarters of the monthly increase in inflation no longer unique.
As expected, specialists anticipated it on several occasions during March, this behavior is the result of a month marked by tensions in the Middle East, particularly after the conflict with Iran, which caused disruptions in the global supply of oil with the closure of the Strait of Hormuz and significantly increased transportation and production costs worldwide.
Just to keep this in perspective, Brent crude, which was trading at $73 a barrel before the war began on February 28, settled at $95.88 a barrel on Friday morning.
For its part, Gasoline prices in the United States have soared almost 40% since the conflict broke out, reaching $4.15 per gallon on Fridayaccording to the AAA. This increase represents the largest monthly increase in gasoline prices since 1957according to Pantheon Economics.
The result of the BLS report was in line with market expectations, where Analysts anticipated inflation close to 3.3% annuallyaccording to a consensus of six estimates compiled by CBS News, amid an environment marked by the rebound in oil prices and geopolitical volatility.
Although the report suggests that inflation is accelerating, the breakdown shows that the main boost came from energy, while other items, such as food, showed signs of containment, albeit temporarily.
The food index remained unchanged during March, with food at home falling 0.2%which was partially offset by a 0.2% increase in out-of-home.
These indicators may change in April, as energy prices, especially gasoline and diesel, tend to make other products more expensive due to transportation costs, and their impact may not yet be fully felt. It must be taken into account that even if the truce with Iran helps mitigate energy costs, When fuel prices rise rapidly, they take time to fall. And this also depends on the ceasefire agreements being maintained.
The report is also closely followed by the Federal Reserve (Fed), which faces an increasingly complex monetary policy environment. At the moment, markets assign around 30% probability to a rate cut towards the end of 2026a significant drop compared to expectations prior to the inflationary rebound, which reflects a more cautious stance regarding the risk that inflation will accelerate again.
Under normal circumstances, inflation data in line with expectations could be received positively by the markets. However, in the real context, The reading should be done with caution, given that the report reflects only the beginning of the impact of rising energy prices and its secondary effects on the economy..
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