A measure of inflation that is closely tracked by the Federal Reserve slipped last month in a sign that price pressures continue to ease.
A clearance sign is displayed at a retail clothing store in Downers Grove, Ill., Tuesday, March 12, 2024. On Friday, March 29, 2024, the government issues its latest monthly report on the Federal Reserve’s preferred inflation gauge, a key measure of how well the Fed’s drive to tame inflation is succeeding.
Friday’s report showed that a sizable jump in energy prices — up 2.3% — boosted the overall prices of goods by 0.5% in February. By contrast, inflation in services — a vast range of items ranging from hotel rooms and restaurant meals to healthcare and concert tickets — slowed to a 0.3% increase, from a 0.6% rise in January.
The acceleration of inflation began in the spring of 2021 as the economy roared back from the pandemic recession, overwhelming factories, ports and freight yards with orders. In March 2022, the Fed began raising its benchmark interest rate to try to slow borrowing and spending and cool inflation, eventually boosting its rate 11 times to a 23-year high. Those sharply higher rates worked as expected in helping tame inflation.
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