US headline inflation, core services rise, in line with expectations

The United States headline inflation rose modestly, in line with market expectations. Core inflation rose, at par with consensus, leaving core CPI inflation up 2.1 pct on year. The NSA index level came in at 239.261, slightly above Barclays Research forecast of 239.2.

Core goods prices came in line with market expectation for a modest retracement from outsized gains in January and February. The series fell 0.1 pct on month, driven mainly by declines in apparel, new vehicles, and used cars and trucks.

Core services prices rose 0.2 pct m/m and 2.7 pct y/y. Shelter posted a 0.3 pct m/m increase as rent of primary residence and owners’ equivalent rent increased 0.3 pct. Medical care services prices rose 0.3 pct m/m, pulling the y/y change down modestly, to 3.0 pct from a recent peak of 3.9 pct in February, Barclays Research reported.

"We view this rise in inflation as consistent with our view that reduced slack in the US economy will continue to put upward pressure on prices," Barclays said in a research note.