After seasonal adjustments, the consumer price index (CPI) dropped by 0.1% in March. This drop led to a year-over-year inflation rate of 2.4%. This drop is record-setting. That’s down from the 2.8% rate recorded in February and is an indication that it is the lowest inflation we’ve experienced since November of 2021. Energy prices have plunged, including a gas prices decrease of 6.3%. This drop was the main reason behind a larger 2.4% drop in the energy index.
Core inflation, which strips out volatile food and energy costs, held firm at an annualized 2.8% in March. Core inflation fell to its lowest level since March of 2021. Though on a positive note, it posted a 0.1% increase on the month. Changes to the inflation landscape The current economic realities present a complicated multiverse of factors that fuels inflation.
The ease in energy prices were vital to countering the growing upward pressure on inflation in March. The drop in the index for energy indicates a positive shift for consumers, mostly due to lower gasoline prices. This trend is not the case in other industries. For the automotive industry, the majority of costs are set to increase due to tariffs.
In March, the used vehicle market experienced a 0.7% decline in prices. The cost of new vehicles actually declined by 0.1%. These decreases indicate that even in the context of larger economic challenges, specific sectors are likely seeing stabilization or pricing decreases.
The automotive industry is collectively bracing for an upcoming storm. Former President Donald Trump declared a blanket 10% tariff on all goods entering the U.S. — a move that would deal a devastating blow to the industry. As the White House enters a 90-day negotiation window for these tariffs, industry experts warn of significant impacts on vehicle pricing and availability.