The U.S. consumer price index, the government's top measure for inflation, had a slight increase in the month of March as the price of goods and services increased by 3.5% in the 12-month period ending last month. The new inflation data was released Wednesday by the government's Bureau of Labor Statistics.
The inflation rate was 3.2% for the 12-month period ending in February and 3.1% for the year ending in January. March's consumer price index marked the highest inflation rate the U.S. has experienced since September 2023.
The consumer price index weighs the costs of goods based on their importance. Items like food, shelter and energy tend to be weighted more heavily.
The new data released on Wednesday could impact people buying homes, cars and other large items. The Federal Reserve's effective interest rate remains at a five-decade high. While the Federal Reserve entered 2024 optimistic that rates would drop during the year, that expectation came with the thought that inflation would drop.
Federal Reserve Chair Jerome Powell has stated that its goal is to get the U.S. to a 2% annual inflation rate. Powell said a rise in interest rates was needed to quell once sky-high inflation that exceeded 9%.
The Federal Reserve meets at the end of the month and could decide on whether it is time to drop interest rates.
SEE MORE: All eyes on the Fed as interest rate cuts have yet to materialize
In the meantime, those buying homes aren't just paying more in the form of higher interest. Inflation is also causing the out-of-pocket expenses for shelter to go up. According to Wednesday's consumer price index data, the cost of shelter has risen 5.7%. For homeowners, that rate is 5.9%, according to the Bureau of Labor Statistics.
While the cost to buy a new or used car has remained stable in the last year, it is now 22.2% more expensive to insure a car, and 8.2% pricier to get one repaired.
The new data did have some promising news for consumers.
The once-astronomical inflation on food at the grocery store has cooled to near-normal levels. Food meant to be consumed at home has gone up 1.2% in the last year, the Bureau of Labor Statistics said. Some common grocery staples, such as milk, eggs, coffee and butter, were cheaper this March compared to last March.
It also appears that wages are outpacing inflation. Average weekly earnings have increased by 4.1% in the last year, the Bureau of Labor Statistics said.
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