Overall price pressures eased a bit in March, but the underlying numbers suggest consumer spending will increasingly be squeezed by higher prices for fuel and food—as well as by prices for services.
Higher prices for fuel—up about 20% from a year ago—are the obvious threat, even though fuel prices eased a bit in March from the prior month.
Food and beverage prices, meanwhile, are still down from a year ago (-0.9%), but those prices have begun to edge higher since January and will result in a return of food price inflation in 2017.
Threatened most of all are retail goods categories, especially discretionary categories. For more on the latest retail sales trends, see this post.
Here is more on what the latest numbers say about:
- Apparel. Apparel prices remain weak. They slipped lower month-to-month, apparently as prior-month price hikes failed to stick in certain categories. On a year-to-year basis, prices are just slightly higher than a year ago.
- Homegoods. Prices for home-related goods remain especially weak—down month-to-month and year-to-year.
- Prescriptions. Prescription drugs are among the few exceptions to flat or falling prices for goods. Prices are up nearly 5% from a year ago.
- Health care. Health care remains a major focus of consumer price inflation. Prices for health care services continue to rise at about a 3.5% rate.
- Other services.Rent and education costs are two other categories where price inflation in services is focused.
These results are based on MacroSavvy’s analysis of latest Consumer Price Index data from the Bureau of Labor Statistics.
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