Consumers faced escalating prices in March as the Iran war sent oil soaring and created a new level of challenges for the Federal Reserve.
The core personal consumption expenditures price index, which excludes food and energy, accelerated a seasonally adjusted 0.3% for the month, pushing the 12-month inflation rate to 3.2%, the Commerce Department reported Thursday. The readings matched the Dow Jones consensus estimates.
Including the volatile gas and groceries components saw higher readings, with the monthly gain at 0.7% and the annual rate hitting 3.5%, also in line with forecasts.
In other economic news Thursday, the Commerce Department reported that gross domestic product grew at a 2% seasonally adjusted annualized pace in the first quarter, up from 0.5% in the fourth quarter of 2025 but lower than the 2.2% estimate. The modest growth rate came despite a seeming surge in spending on artificial intelligence and what should have been a boost from the end of last year’s government shutdown.
In another report Thursday, the Labor Department reported that initial jobless claims totaled a seasonally adjusted 189,000 for the week ending April 25, a decline of 26,000 from the prior week and well below the 212,000 estimate. It was the lowest reading in decades for a labor market that has been in a low-hire low-fire mode for most of the past year.
