Inflation rate falls for 9th straight month, but some regions hit harder amid recession fears

Inflation eased in March but remained high, especially in states looming as battlegrounds in next year’s presidential election.

Prices rose at an annual rate of 5% last month, the Bureau of Labor Statistics said Wednesday, down a full percentage point from the 6% annual rate in February. The inflation rate fell for the ninth straight month and is down from last June’s peak of 9.1%, but is still more than three times higher than the 1.4% rate when President Biden took office.

In some key states that will be up for grabs in 2024, prices remain much higher than the national average.

The personal finance website WalletHub reported that prices in the Phoenix-Scottsdale region of Arizona rose 8.5% in March, year over year. Inflation in the Tampa, Florida, region was 7.7%, and prices in the Atlanta metropolitan area came in 7.2% higher. In the Detroit metropolitan area, inflation was 7%. It came in at 6.9% in Philadelphia. The site compared BLS data for 22 metropolitan areas.

And the core monthly inflation index, which is less likely to drop because it omits volatile food and fuel prices, actually increased slightly to 5.6% compared to February’s 5.5%. A significant part of the overall inflation cooldown has come from falling energy prices.

Online grocery prices were up 10.3% in March from the previous year, according to the Adobe Digital Price Index.

Stocks fell Wednesday, despite the declining inflation rate, as investors weighed minutes from the Federal Reserve’s March policy meeting that showed officials worrying about a mild recession by the end of the year. 

The Dow Jones Industrial Average fell 38 points or 0.1% to close at 33,646.

Mr. Biden, who is on a trip to Ireland, hailed the inflation report as good news but said his administration has more work to do.

“Today’s report shows continued progress in our fight against inflation with the 12-month inflation rate at the lowest level since May 2021,” Mr. Biden said. “While inflation is still too high, this progress means more breathing room for hard-working Americans – with wages now higher than they were 9 months ago, after accounting for inflation.”

Republicans remain far less optimistic than Mr. Biden about the state of the economy.

“Inflation is up, wages are down, and Americans are struggling to stay afloat in Biden’s failed economy,” Republican National Committee Chairwoman Ronna McDaniel said. “Democrats have neither answers nor solutions — their policies only worsen the economic burden on families, yet Biden wants taxpayers to foot the bill for his $6.9 trillion tax-and-spending spree that will send inflation soaring even higher.”  

Sen. Ted Cruz, Texas Republican, said the inflation report showed “24 months in a row of negative real wages.”

“The American people are sick of Biden’s economy,” he tweeted.

Mr. Biden said his administration is “continuing to fight to lower costs for families.” He cited actions to cap insulin costs at $35 per month for seniors and allow Medicare to negotiate lower prices. He also touted his efforts to boost domestic manufacturing and spread good-paying jobs throughout the U.S.

“We should build on that progress with policies to grow our economy, lower costs, create jobs, and reduce the deficit,” Mr. Biden said. “And we must reject reckless proposals from congressional Republicans to take our economy hostage in order to cut taxes for the wealthy and large corporations, and bring back failed trickle-down policies that would ship jobs overseas and gut programs that are lowering costs for seniors, middle-class families, and hard-working Americans.”