April 11, 2025 09:00 AM PST
(PenniesToSave.com) – The March 2025 Consumer Price Index (CPI) report shows what appears to be a positive shift in the inflation trend. But for millions of American households, the numbers do not tell the full story. While the overall index declined slightly, many essential goods and services continue to climb in cost, leaving families still feeling the pressure.
CPI Data Suggests Cooling… At First Glance
The U.S. Bureau of Labor Statistics reported that the CPI for all urban consumers fell by 0.1 percent in March, following a modest 0.2 percent increase in February. This marks the first monthly decline in over a year. On an annual basis, inflation slowed to 2.4 percent, down from 2.8 percent the month before. Core CPI, which excludes food and energy, rose just 0.1 percent in March, its smallest monthly gain in years.
On paper, this looks like inflation is moving in the right direction. And it is—if you are only looking at broad averages and temporary energy price swings.
Gas Prices Pulled the Headline Number Down
The biggest contributor to March’s decrease in the CPI was gasoline. Prices at the pump dropped 6.3 percent in just one month, while the broader energy index fell 2.4 percent. Over the past year, gasoline prices have dropped nearly 10 percent.
While this decline eases short-term transportation costs, it is not a sign of deep-rooted price stability. Energy prices are known for their volatility. A drop in gas may improve headlines, but it does not offset persistent increases in housing, insurance, food, and medical costs.
Food Costs Continue to Climb
Food inflation remains a pain point for American families. The food index rose 0.4 percent in March. Grocery prices alone were up 0.5 percent, and specific staples saw even sharper increases. Egg prices jumped 5.9 percent in a single month, and the meats, poultry, fish, and eggs category is up 7.9 percent compared to this time last year.
The food away from home index rose 0.4 percent in March and is up 3.8 percent year-over-year. For families trying to stretch their grocery budgets or avoid eating out, relief remains elusive.
Housing and Shelter: Still Too Expensive
Shelter costs are one of the largest ongoing drivers of inflation. In March, the shelter index rose another 0.2 percent and is now up 4.0 percent over the last 12 months. Owner’s equivalent rent increased 0.4 percent for the month, while rent itself rose 0.3 percent.
This is the smallest annual increase in shelter since late 2021, but housing costs remain elevated. Americans continue to spend a substantial portion of their income on rent or mortgages, and the slowdown in rent inflation has not translated into meaningful savings for most households.
Core Services Quietly Push Prices Higher
While energy prices made headlines, many essential services continued to increase. Medical care services rose 0.5 percent in March, with hospital service prices up 1.1 percent. Education and apparel each rose 0.4 percent, while personal care products jumped 1.0 percent.
Motor vehicle insurance, a necessity for most households, is up 7.5 percent year-over-year. The cost of insurance alone has become a growing burden, particularly for drivers in urban areas.
Airfare and used car prices did fall slightly in March, but these categories are less central to the monthly budgets of most Americans.
Final Thoughts
The March CPI report tells a mixed story. Yes, the headline number is down, and that can be spun as progress. But for working families, the inflation they feel day-to-day—in groceries, rent, insurance, and healthcare—has not meaningfully improved.
While President Trump’s economic team may point to easing inflation as a sign of stabilizing conditions, many Americans are not feeling the benefit. If Washington focuses only on averages and indexes while ignoring the cost of basic goods and services, they risk missing the economic reality that voters experience every time they go to the store or pay their monthly bills.
Cooling inflation on paper does not erase the fact that many household essentials remain historically expensive. Until those costs come down, the average American will continue to feel the squeeze.