Central banks are in a global race to get inflation under control. The Reserve Bank of NZ was first to hike amid Covid, but it may be the last to cut.
Video / NZ Herald / Carson Bluck / Getty
US inflation rose in March at the same pace as the month before, according to the country’s key inflation measure.
The United States has been mostly battling inflation better than New Zealand in recent months.
But the latest US data reinforces concerns about stubborn inflation, which influence thecash rates important for Kiwi borrowers and savers.
Housing and petrol prices drove most of the 0.4 per cent seasonally-adjusted rise in the Consumer Price Index for All Urban Consumers (CPI-U).
At the same time, real average hourly earnings for all employees were unchanged from February.
“The food at home index was unchanged, while the food away from home index rose 0.3 per cent over the month,” the US Bureau of Labor Statistics said today, New Zealand time.
“The index for all items less food and energy rose 0.4 per cent in March, as it did in each of the two preceding months.”
Housing and accommodation, car insurance, eggs, medical care and clothing got more expensive.
The index for meat, poultry, fish and eggs was up 0.9 per cent month-on-month, with eggs alone up 4.6 per cent.
CNBC in January reported “highly pathogenic avian influenza” was a possible factor in egg price rises, as was rising consumer demand.
Chickens being moved from barns in Tennessee last November. Bird flu has been cited as a possible reason for the big surge in US egg prices. Photo / Rory Doyle, The New York Times
Bird flu earlier this month led to the cull of 1.6 million chickens at the country’s biggest chicken egg producer in Texas, NPR reported.
Meanwhile, cars and trucks were cheaper in March, as were recreational activities measured in the CPI-U.
New vehicles in the US were 0.2 per cent cheaper and used cars and trucks were 1.1 per cent cheaper.
Inflation year-on-year was up 3.5 per cent. Food prices were up 2.2 per cent over the year.
ASB economists this morning said the annual shift in US consumer price inflation was slightly higher than anticipated.
“A range of service prices are proving time-consuming to come down, underlining the risk that the Fed needs to keep rates at current levels for longer than markets have been hoping,” ASB economists added.
The inflation data was published three weeks ahead of the Federal Reserve’s next call on the Federal Funds Rate.
The Reserve Bank (RBNZ) cited stubborn inflation and lacklustre economic growth at home and abroad for keeping the rate at that level.
“Globally, while there are differences across regions, economic growth remains below trend and is expected to remain subdued,” the RBNZ said yesterday.
“Most major central banks are cautious about easing monetary policy given the ongoing risk of persistent inflation.”
