The Bureau of Labor Statistics published yesterday the latest report of the U.S inflation for March 2012. According to the report the consumer price index increased by 0.3% and in annual terms the US CPI increased by 2.9%. The consumer price index without food and energy also edged up by 0.2% during March and 2.3% in the past twelve months.
The prime reason for the increase in the U.S. consumer price index was related to sharp gain in the energy index: the energy index rose by 0.9% (M-2-M) during March; in annual terms the energy index increased by 4.6%; among the energy products, the fuel oil led the rise with a 2.7% gain during the month. Furthermore, the food index slightly increased during March 0.2% and by 3.3% in annual terms.
The core U.S inflation (CPI sans energy and food) slightly rose by 0.2% during March and by 2.3% during the past 12 months. This figure coincides with the recent U.S PPI report, in which the core PPI also increased by 0.3% during March.
In the previous month the February 2012 CPI rose by 0.4% and the core CPI edged up by 0.1% (M-2-M).
The chart below presents the development of the month to month percent changes of the U.S. CPI during 2011 and 2012.
This news may have some moderate effect on the path of the U.S dollar against other currencies as the U.S dollar depreciated against many currencies. On the other hand if the U.S CPI will continue to rise in the months to come, this situation could lower the chances of another QE style intervention by the Fed during 2012. This scenario could also lower the chances of the FOMC keeping its promise of low interest rates until late 2014.
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