CPI Inflation Report and a 25-Year Perspective
The BLS released its Consumer Price Index report for March, with the following highlights:
1.The Consumer Price Index for All Urban Consumers increased 0.5 percent in March on a seasonally adjusted basis. Over the last 12 months, the all items index increased 2.7 percent.
4. Overall food prices increased by 2.9% on an annual basis, with the "food at home" component increasing by 3.6% and "food away from home" increasing only 1.9%, suggesting that restaurants are absorbing some of the food prices increases to stay competitive.
5. Apparel prices fell by -0.60% compared to last March, marking the 13th consecutive month that clothing prices have fallen on a year-over-year basis. American consumers can thank globalization and trade for delivering the most affordable clothing in history - 50 years ago Americans spent 8% of their disposable income on clothing that was probably all "Made in the USA" and relatively expensive, and today they spend less than 3% of disposable income on low-cost clothing that is made all over the world.
MP: See the chart above for a 25-year historical view of annual inflation for both the CPI: All Items and core inflation. Since 1985, the average annual inflation rate for both series is 2.9%, meaning that inflation today is below the 25-year average especially for core inflation at only 1.2%.