Annual Inflation Hits 40-Year High of 8.5% in March

Economics
Published

Driven by higher food, gasoline and housing cost, consumer prices continued to accelerate in March, bringing the annual inflation rate up to 8.5% — a 40-year high. March was the sixth straight month for inflation above a 6% rate and it was the fastest annual pace since December 1981. Though gas prices have fallen slightly from their March highs, the pace of inflation will likely stay high in the months ahead as lockdowns in China threaten to exacerbate global supply-chain issues.

The Bureau of Labor Statistics (BLS) reported that the Consumer Price Index (CPI) rose by 1.2% in March on a seasonally adjusted basis, following an increase of 0.8% in February. Meanwhile, the “ core” CPI, which excludes the volatile food and energy components, increased by 0.3% in March, following an increase of 0.5% in February. The price index for a broad set of energy sources rose by 11.0% in March, and the food index increased by 1.0%.

In March, the indexes for gasoline, shelter, and food were the largest contributors to the increase in the headline CPI. The gasoline index rose by 18.3% in March and accounted for over half of the headline CPI increase. Meanwhile, the food index rose by 1.0%.

The index for shelter, which makes up more than 40% of the “core” CPI, rose by 0.5% in March. The indexes for owners’ equivalent rent (OER) and rent of primary residence (RPR) both increased by 0.4% over the month. Monthly increases in OER have averaged 0.4% over the last three months. More cost increases are coming from this category, which will add to inflationary forces in the months ahead.

NAHB economist Fan-Yu-Kuo provides more analysis in this Eye on Housing blog post.

Subscribe to NAHBNow

Log in or create account to subscribe to notifications of new posts.

Log in to subscribe

Latest from NAHBNow

Advocacy | Tax Reform

May 20, 2025

Podcast: One Big, Beautiful Podcast – NAHB Talks Tax Bill

On the latest episode of NAHB’s podcast, Housing Developments, CEO Jim Tobin and COO Paul Lopez are joined by AVP of Government Affairs J.P. Delmore to dive into the “big, beautiful” tax bill that’s been introduced.

Membership

May 20, 2025

Why You Should Apply to Be the Next National Associate Chair

Applications to serve as the next National Associate Chair are now open through Sunday, July 13.

View all

Latest Economic News

Economics

May 20, 2025

Single-Family Home Size Trending Higher

An expected impact of the virus crisis was a need for more residential space, as people used homes for more purposes including work. Home size correspondingly increased in 2021 as interest rates reached historic lows. However, as interest rates increased in 2022 and 2023, and housing affordability worsened, the demand for home size has trended lower.

Economics

May 20, 2025

Slight Gains for Townhouse Construction

Townhouse construction expanded more than 2 percent on a year-over-year basis per data from the first quarter of 2025.

Economics

May 19, 2025

Flat Growth for Single-Family Built-for-Rent

Single-family built-for-rent construction posted flat growth on a year-over-year basis, as a higher cost of financing crowded out development activity.