The U.S. Consumer Price Index cooled to 5 percent in March compared to a year ago, but remained elevated overall despite efforts from the Federal Reserve to curb inflation, according to the Bureau of Labor Statistics.

In these times, double down — on your skills, on your knowledge, on you. Join us Aug. 8-10 at Inman Connect Las Vegas to lean into the shift and learn from the best. Get your ticket now for the best price.

The United States Consumer Price Index cooled to 5 percent in March compared to a year ago, but remained elevated overall despite the Federal Reserve’s efforts to harness price growth on consumer goods and housing.

The CPI for all urban consumers, a measure of inflation, rose 0.1 percent in March after climbing 0.4 percent in the previous month and 5 percent over the past 12 months, according to Bureau of Labor Statistics data released Wednesday.

Housing was flagged as the biggest contributor to the monthly CPI increase, with the index for shelter increasing 0.6 percent in March after increasing 0.8 percent in February.

The 5 percent increase recorded between March 2022 and March 2023 was the smallest annual increase recorded since May 2021, according to the BLS. Inflation remains well above the Fed’s 2 percent target and well above the 2.1 percent average seen in the three years leading up to the pandemic.

The Bureau of Labor Statistics’ index for food, meanwhile, decreased modestly by 0.3 percent while its energy index fell 3.5 percent, with all major energy indices declining. Beside shelter, indices for motor vehicle insurance, airline fares, household furnishings and new vehicles all increased, but none as much as housing, according to federal statisticians.

Housing inflation has remained stubbornly high because it is largely out of reach of the Federal Reserve’s regulations, experts explained.

“Housing costs are still a key driver of inflation, accounting for the largest part of the monthly increase in the CPI,” Bright MLS Chief Economist Dr. Lisa Sturtevant said in a statement. “The challenge with housing is that there are so many factors beyond the control of the Federal Reserve keeping housing costs high.”

The Federal Reserve has raised interest rates nine times over the past year in an effort to cool inflation following an economic rebound from the pandemic amid supply chain disruptions and labor shortages.

Fed officials raised the benchmark federal funds rate by a quarter percentage point in March bringing it to a range between 4.75 percent and 5 percent. Officials have signaled that stress on the banking system — resulting in the failures of regional lenders Silicon Valley Bank and Signature Bankmay end their campaign against inflation sooner than they had previously planned.

Higher interest rates have led to high mortgage rates which has drastically slowed the once red-hot housing market.

“High inflation led the Fed to raise interest rates, leading to higher borrowing costs, including making it more expensive to finance a home purchase,” Sturtevant said. “These higher rates are designed to lower demand for housing (and all sorts of other things) to reduce upward pressure on prices.”

“By some measures,” she added, “the inflation-fighting rate increases have been working to slow demand and ease price growth. Higher mortgage rates have slowed demand by pricing some would-be buyers out of the market.”

Email Ben Verde

Show Comments Hide Comments
Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Thank you for subscribing to Morning Headlines.
Back to top
Only 3 days left to register for Inman Connect Las Vegas before prices go up! Don't miss the premier event for real estate pros.Register Now ×
Limited Time Offer: Get 1 year of Inman Select for $199SUBSCRIBE×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription