The US consumer price index, which measures the cost of goods and services, rose faster than expected in March with an annual inflation rate of 3.5%, CPI report in March released by the Bureau of Labor Statistics (BLS) on Wednesday.
Prices for necessities have risen, with the average American family paying $227 more per month for goods compared to a year ago.
The annual inflation rate recorded in February was lower, with 3.2%.
The agency attributed more than half of the monthly rise in inflation to rising energy and housing prices. Housing costs rose 5.7% from last year, while gasoline rose 1.7% (or 6.4% before seasonal adjustments).
Transportation services grew the most of all categories, up 10.7% year over year.
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Housing costs are weighted as one third of the CPI; CNBC reports that the expectations for the reduction of the costs of this category throughout the year have been decisive for the possible reductions in interest rates.
Food prices also rose, according to the CPI, but not across the board: Meat, poultry, fish and egg prices rose 0.9% over the year, while fruit and vegetable prices rose 2%.
Prices of dairy products fell 1.9% in the same period.
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Meanwhile, a separate summary of BLS real earnings from march shows that average hourly earnings for workers rose by just 0.6% last year.
American households are spending an average of more than a thousand dollars more on goods per month than they did three years ago, according to the ABC News.
Will the Federal Reserve Cut Interest Rates?
The CPI report reduces the likelihood that the Federal Reserve will cut interest rates in June.
Economist Paul Ashworth of Capital Economics wrote to clients in a note obtained by USA TODAY that rising inflation “kills a lot of hopes for a June rate cut.”
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“That means mortgage rates, car loans, credit card APRs all stay higher for longer,” ABC News' Rebecca Jarvis. DECLARING.
Inflation has decreased since then Point 9.1%. in June 2022, but is still above the Fed target of 2%.