US consumer price inflation fell in March, supporting the possibility of more interest rate cuts by the Federal Reserve this year, despite the uncertain monetary policy outlook given President Donald Trump's protectionist agenda.
Official data released today, April 10, showed that the annual consumer price inflation rate tumbled to 2.4% in March, from 2.8% in February, against expectations of a slowdown to 2.6%.
Moreover, core inflation—which excludes volatile food and energy prices—recorded its lowest rate since March 2021, at 2.8%.
On a monthly basis, the overall consumer price index edged down by 0.1% last month, after increasing 0.2% in February. Meanwhile, the core index climbed by 0.1% in March, following a 0.2% rise in the previous month.
Contributing to the monthly decline in the CPI were a 2.4% pullback in energy prices, a 1.4% decline in transportation services, and a 1.1% slump in healthcare costs.
Housing costs, which have long been a focus of the Fed and former US President Joe Biden's administration, added 0.22% on a monthly basis and 4% on an annual basis in March, marking the slowest growth pace since 2021, Bloomberg reported.
Other official data also released today indicated that US unemployment claims rose to 223,000 last week, from 219,000 the previous week, suggesting a cooling labor market momentum in the world's largest economy.
Together, such data could pave the way for the Fed to continue easing interest rates, as inflation is on track without sudden spikes, Torsten Slok, chief economist at Apollo, told Bloomberg.
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