US Inflation is Weakening Due to Cheaper Fuels

Inflation in the United States rose a lot less quickly in March than a month earlier. However, compared to a year earlier, life became 5 percent more expensive last month, according to the US government.

Inflation was still 6 percent in February, but the falling prices of fuel and second-hand cars put a brake on further monetary depreciation.

Core inflation, which is essential to the Federal Reserve, did increase. That is inflation without the strongly fluctuating prices for energy and food. It was 5.6 percent annually, compared to 5.5 percent in February. So, for example, living costs rose annually by more than 8 percent and transport by almost 14 percent.

Food is also still rapidly becoming more expensive in the US. Eating at home cost 8.4 percent more than one year previously, and eating out became 8.8 percent more expensive. But on the other hand, fuel became more than 17 percent cheaper than a year earlier. In addition, Americans paid more than 10 percent more for electricity than in March 2022.

The inflation figures play an essential role in the interest rate policy of the Fed, which is aimed at keeping inflation in check. So the fact that inflation is rising less rapidly is good news in that respect and may mean that interest rates will not be raised any further. But both inflation and core inflation are still well above the Fed’s target of around 2 percent.

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