Friday’s report from the government showed that prices rose 0.3 percent from February to March, the same as in the previous month. It was the third straight month that the index has run at a pace faster than is consistent with the Fed’s 2 percent inflation target.
A clearance sign is displayed at a retail clothing store in Downers Grove, Ill., Monday, April 1, 2024. On Friday, April 26, 2024, the Commerce Department issues its March report on consumer spending.
With new-car prices up sharply in the past few years, auto repair and replacement costs have risen especially fast. Auto insurance, a major driver of inflation in recent months, was up 8 percent in March from a year earlier. “Recent data have clearly not given us greater confidence” that inflation is coming fully under control, Powell said last week, and “instead indicate that it’s likely to take longer than expected to achieve that confidence.”
One reason why inflation has remained persistently elevated is that many Americans are still willing to spend even at higher prices. In March, consumer spending jumped 0.8 percent for a second straight month, well above the rate of inflation. The spending figure underscored that even while the US economy slowed in the first three months of 2024, consumer demand remained healthy, suggesting that economic growth remains on track.
Average incomes, adjusted for inflation, grew 0.2 percent in March, Friday’s report said. After-tax disposable incomes are 1.4 percent higher than they were a year earlier, a modest gain, the figures show.
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