US inflation surged in March, with CPI rising 0.9% mom and lifting the annual rate from 2.4% yoy to 3.3% yoy. While the jump was significant, both figures came in slightly below expectations of 1.0% mom and 3.4% yoy respectively, suggesting the energy-driven spike was largely anticipated.
The surge was overwhelmingly driven by energy costs. Energy prices jumped 10.9% mom, led by a 21.2% spike in gasoline, which accounted for nearly three quarters of the monthly increase in headline CPI.
In contrast, underlying inflation pressures remained more contained, with core CPI rising 0.2% mom and edging up from 2.5% yoy to 2.6% yoy, both below expectations of 0.3% mom and 2.7% yoy.
Other components painted a more stable picture. Shelter rose 0.3% mom, continuing its gradual climb, while food prices were unchanged on the month. Overall, the data reinforces the view that the inflation spike is largely energy-driven, with limited evidence so far of broad-based second-round effects.
