According to The National Association of Manufacturers’ (NAM) Monday Economic Report this week, the Bureau of Labor Statistics reported that the Consumer Price Index rose 0.4% last month, up 3.5% from a year ago in March. The index for shelter and gasoline rose in March and combined, contributed to over half of the monthly increase. As markets had expected the Fed to start cutting interest rates in June, it seems unlikely given the higher-than-expected inflation report.  

While grocery categories show mixed trends, the energy index increased 1.1% with gasoline prices rising 1.5% and electricity prices up 0.9%, although natural gas prices remained stable and fuel oil prices dropped 1.3%. 

The University of Michigan’s Consumer Sentiment Index showed a minor increase in inflation expectations in the next year, up from 2.9% to 3.1%, and long-term inflation expectations also increasing from 2.8% to 3.0%. The NFIB Small Business Optimism Index decreased by 0.9% in March to 88.5, the lowest level since December 2012.  Commentary from the NFIB highlights that falling net sales expectations and continued stress in navigating inflation pressures are driving the decline.