The overall consumer price index (CPI) fell by -0.05% last month, the first outright decline since May 2020, as prices for gasoline, airfare, lodging and used vehicles were all negative. On a year-over-year basis, headline CPI rose +2.4% in March, matching a four-year low. Core CPI, which excludes food and energy prices, was up by just +0.06%, the lowest monthly gain since early 2021. On a year-over-year basis, core CPI slipped from +3.1% to a four-year low of +2.8%. Core services accounted for the entire annual core increase, with core goods down slightly.

The widely-acknowledged first quarter decline in consumer demand seemed to have had an oversized effect on travel, as evident in the prices of gasoline (-6.3%) and airfare (-5.3%). Hotel/motel prices fell by the most in over three years. Overall shelter costs, which make up 35% of the total index, climbed just +0.2% last month, the lowest since November 2021. As anticipated, an increase in housing supply has driven shelter costs down over the past year and should continue to exert downward pressure in the coming months.

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