Inflation rises just 0.1% in March and 5% from a year ago as Fed rate hikes take hold

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Inflation cooled in March as the Federal Reserve’s interest rate increases showed more impact, the Labor Department reported Wednesday.The consumer price index, a widely followed measure of the costs for goods and services in the U.S. economy, rose 0.1% for the month against a Dow Jones estimate for 0.2%, and 5% from a year ago versus the estimate of 5.1%.Excluding food and energy, the core CPI increased 0.4% and 5.6% on an annual basis, both as expected.The data showed that while inflation is still well above where the Fed feels comfortable, it is at least showing continuing signs of decelerating. Policymakers target inflation around 2% as a healthy and sustainable growth level. The headline annual increase for the CPI was the smallest since June 2021.A 3.5% drop in energy costs and an unchanged food index helped keep headline inflation in check. Food at home fell 0.3%, the first drop since September 2020, though it is still up 8.4% from a year ago. Egg prices, which had been soaring, tumbled 10.9% for the month, putting the 12-month increase at 36%.A 0.6% increase in shelter costs was the smallest gain since November, but still resulted in prices rising 8.2% on an annual basis. Shelter ma …