Prices Keep Going Up: What’s Happening with Inflation?
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Prices Keep Going Up: What’s Happening with Inflation?

In March, the prices of things we buy went up more than expected. The Labor Department said it’s mainly because housing and energy costs are going up.

Every month, the government looks at the prices of things people buy, like food and clothes. This time, they found that prices went up by 0.4%. That’s the same as February and more than what experts thought, which was a 0.3% increase. Over the whole year, prices went up by 3.5%, higher than the 3.4% that was expected and even more than February’s 3.2%. When they don’t count food and energy, which can change a lot, prices still went up by 0.4% for the month and 3.8% for the year. “Prices for places to live went up in March, as well as prices for gasoline,” the report said. “Together, these two things made up more than half of the increase in prices for everything. Energy prices went up by 1.1% this month. Food prices only went up by 0.1% in March. Prices for food at home stayed the same, but prices for eating out went up by 0.3%.”

This increase in prices is like what we’ve been seeing lately. It shows that while the price increases from the pandemic are going down, they’re not gone yet. “It looks like prices are going up again,” said Karen Manna from Federated Hermes. “People thought the government would make it easier to borrow money, but now they might not. The stock market went down a lot after this report came out.”

Before this report, people thought the government might lower interest rates in May or June, but now they’re not sure if that will happen at all.

The Federal Reserve, which is like the country’s money manager, looks at a different report to see how prices are doing. In that report, prices went down a little to 2.5% overall and 2.8% without food and energy.

The government thought the economy would slow down, so they raised interest rates in 2022. But that didn’t happen, and now the economy is still strong. That’s why prices are going up more than the government wanted. The head of the Federal Reserve, Jerome Powell, said they might lower interest rates in 2024, but he didn’t say when. Some other people from the Federal Reserve say they might only lower interest rates once or twice, and maybe not until later in the year.

Later today, the Federal Reserve will talk about what they’re thinking, and that might help us understand more about what’s going to happen. It will also depend on if fewer people are getting jobs and if the economy slows down. Right now, a report from the Federal Reserve Bank of Atlanta says the economy grew by 2.5% in the first three months of the year. That’s a little lower than before.

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