US inflation surged to an annual 3.3pc in March, lifted by higher war-driven energy costs, including the largest monthly gain for gasoline on record.
The consumer price index rose at the fastest pace since mid-2024, climbing from 2.4pc in the 12 months through February, according to the Bureau of Labor Statistics (BLS). The gain was in line with estimates of economists surveyed by Trading Economics.
Energy rose to an annual 12.5pc in March compared with a 0.5pc annual gain in February. The 10.9pc monthly gain in energy was the largest for a single month since September 2005.
Gasoline surged by an annual 18.9pc in March after falling by 5.6pc in February. Gasoline's monthly gain was 21.2pc, the largest monthly gain since records began in 1967, according to BLS.
Fuel oil rose by 44.2pc in March from a year earlier, following a 6.2pc annual gain in February. The 30.7pc monthly gain in fuel oil was the highest monthly gain since February 2000, according to BLS.
Energy services rose by an annual 5pc in March compared with a 6.3pc gain in February. Electricity rose by 4.6pc compared with a 4.8pc gain in February.
Airline fares rose by 14.9pc following a 7.1pc gain the prior month.
Core drop, flat Fed rate still expected
So called core inflation, which strips out more volatile food and energy, rose by 2.6pc compared with a 2.5pc gain the prior month.
"Looking ahead, core CPI inflation still looks set to fall this year, now that nearly all the tariff costs have been passed through to consumer prices, unit labor costs are rising at a sub-2pc pace, and new rents are essentially flat," Pantheon Macroeconomics said in a note.
Fed funds futures suggest the Federal Reserve is likely to keep its target rate unchanged at 3.5-3.75pc through the end of the year, with about a 24pc probability of one quarter-point rate cut by December and just a 1.1 point chance of a rate hike.
Services less energy services, considered core energy services, rose by 3pc compared with a 2.9pc gain the prior month.
Medical care services rose by 3.7pc following a 4.1pc annual gain.
Food rose by an annual 2.7pc following a 3.1pc gain. Meat rose by 6.8pc, down from 8.6pc.
Shelter rose by 3pc, unchanged from the prior month.
New vehicles rose by 0.5pc while used vehicle prices fell by 3.2pc in March from a year prior, both unchanged from a month earlier.
