March inflation rates showed gas, home and auto insurance to rise for another month (iStock)
A stronger-than-expected rise in consumer prices in March pushed up inflation and gave the Federal Reserve more reason to delay cutting interest rates.
On an annualized basis, prices rose 3.5% in March, higher than last month’s 3.2% rise and also above economists’ expectations for 3.4% growth. consumer price index (CPI) Published by the Bureau of Labor Statistics (BLS). On a month-on-month basis, prices increased by 0.4%, the same growth rate as the previous month. Core inflation, which excludes volatile food and energy prices, rose 0.4%, the same as in each of the previous two months. On an annual basis, core CPI increased by 3.8%.
Shelter and gasoline costs weighed heavily on consumer spending, contributing to more than half of the monthly increase in all items. The energy index rose 1.1% in January after rising 2.3% in February. Shelter prices rose 0.4% over the past two months, for a yearly increase of 5.7%. Consumers are also facing price increases in other areas of spending. In particular, auto insurance prices increased by 2.6% in March, following a 0.9% increase in February. The apparel index rose 0.7% from the previous month. Prices for personal care, education, household goods and business also rose.
March’s CPI data weakens expectations that the Fed will cut interest rates soon. Federal Reserve Chairman Jerome Powell said after the March meeting that while cutting rates this year was still on the table, the central bank had revised its forecast for only three rate cuts this year. Chairman Powell said the Fed remains committed to lowering inflation to its 2% target rate, noting that cutting rates too soon risks a rebound in inflation, and cutting rates too long risks economic growth. I warned you it would happen.
“Prices continue to rise across the board, putting pressure on the finances of American households in particular,” said Max Slyusalchuk, founder and CEO of A&D Mortgage. “The cost of home and auto insurance continues to rise, and families are increasingly feeling the pressure. But the economy remains strong, so don’t expect the Fed to cut rates anytime soon.”
If you’re struggling with high inflation, you might consider taking out a personal loan to pay off your debt at a lower interest rate and reduce your monthly payments. Visit Credible to find the interest rate that’s right for you without affecting your credit score.
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Consumers face tough housing market
According to , high mortgage rates and home prices are making it a better month-to-month deal to rent than to buy a starter home in all 50 major metro markets. Realtor.com February 2024 Rental Report. But despite evidence that rents are falling, the shelter index remains elevated.
Daniel Hale, chief economist at Realtor.com, said part of the disparity is due to the way rents are measured in the index. CPI calculates rent based on rent trends, cash rent paid to landlords, including housing and utilities, and government subsidies paid to landlords on behalf of tenants. If the unit is owner-occupied, the index calculates how much it costs to rent the home in the current housing market, known as owner-equivalent rent (OER).
“This is why shelter inflation continues to rise, even though Realtor.com data shows rents have fallen for seven consecutive months,” Hale said in a statement. “This is a key factor tilting households towards renting, as the monthly cost of renting a starter home is lower than buying at today’s market rates in all 50 major markets considered.”
Homebuyers are unlikely to get much relief from high mortgage rates, which have remained below 6.6% so far this year.
“While a June rate cut already seems like a long shot at this point, it still seems likely that short-term rates will decline toward the end of this year,” said Xander Snyder, senior economist at First American, in a statement. Stated. “However, there are many global uncertainties that could lead to a supply shock that reaccelerates inflation, potentially pushing the timing of rate cuts further down the line.”
If you’re looking to become a homeowner, shopping around can help you find the best mortgage rates. Visit Credible to compare options without affecting your credit score.
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Manage your car insurance with these steps
Car insurance premiums are steadily rising. According to a recent study, a driver will pay an average of $1,841 to insure his car in 2023, an increase of 5% from the previous year. report From zebra. This is after a 15% increase from 2022 to 2023. Unfortunately, more of the same could happen in 2024.
Drivers can save money by looking for new savings opportunities with their current carrier or by switching. Here are some other options to consider to keep your car insurance affordable:
- Compare quotes from at least four to five companies before choosing a policy, and reevaluate your policy every six months to make sure it meets your needs.
- Consider insurance discounts and savings. Policies that offer discounts for low-risk behaviors, such as AAA membership or taking advanced driving safety courses, can help drivers lower their auto insurance premiums. Alternatively, telematics programs can help drivers save money based on their driving habits.
- Pay only for the coverage you want and need. Understanding what your insurance covers is the first step to determining whether it covers your needs. According to Insurify, every state in the U.S. except New Hampshire requires liability coverage. Compensates for injuries and property damage sustained by the other party when you cause an accident.
If you’re struggling with rising prices and want to save money, consider finding a new car insurance company to lower your monthly premiums. Visit Credible to compare multiple auto insurance companies at once and choose the one that offers the best rates for you.
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