Consumer prices rose at the slowest pace since May 2021 as inflation showed further signs of easing in March, according to the latest data from the Bureau of Labor Statistics released Wednesday morning.
The Consumer Price Index (CPI) revealed headline inflation rose 0.1% over last month and 5.0% over the prior year in March, a slowdown from February’s 0.4% month-over-month increase and 6% annual gain.
Both measures were slightly better than economist forecasts of a 0.2% month-over-month increase and 5.1% annual increase, according to data from Bloomberg.
The 5% jump in inflation marks the slowest annual increase in consumer prices since May 2021 but is still significantly above the Federal Reserve’s 2% target. The Fed has been raising interest rates to try to bring down inflation, but the central bank risks sending the economy into a recession by hiking rates too high too fast.
“If I think about the economic outlook as four potential scenarios: (1) soft-landing, (2) recession, (3) continued overheating, (4) stagflation – the odds of stagflation went down while the odds of soft-landing went up. Good news for stocks,” Neil Dutta, head of economics at Renaissance Macro Research, wrote in reaction to the report on Wednesday.
Read the full report from Alexandra Canal in Yahoo Finance here.