Personal Finance

Here’s the inflation breakdown for March 2024 — in one chart

Published

11 months ago

April 10, 2024

Eric Thayer/Bloomberg via Getty Images

Inflation jumped in March as prices for consumer staples like gasoline edged higher and those for housing remain stubbornly high, suggesting inflation may be a bit stickier than seemed just a few months ago, economists said.

The consumer price index, a key inflation gauge, rose 3.5% in March from a year ago, the U.S. Labor Department reported Wednesday. That’s up from 3.2% in February.

CPI measures how fast prices are changing across the U.S. economy. It measures everything from fruits and vegetables to haircuts, concert tickets and household appliances.

The March inflation reading is down significantly from its 9.1% pandemic-era peak in 2022, which was the highest level since 1981. However, it remains above policymakers’ long-term target around 2%.

Progress in the inflation fight has somewhat flatlined in recent months.

“The disinflation has stalled out,” said Mark Zandi, chief economist at Moody’s Analytics.

“The big rock in the way here is the cost of shelter,” Zandi said.

While housing costs have moderated, they account for the largest share of the CPI inflation index and “are still growing strongly,” he added.

Despite progress having stalled, broader evidence doesn’t suggest a renewed surge in inflation — though it may take longer than expected to bring the rate back to target, economists said. In fact, underlying inflation after stripping out shelter costs is already back to target, Zandi said.

“I still hold to the view that inflation is moderating,” Zandi said. “It’s just taking frustratingly long to get there.”

Household paychecks can buy more stuff, though

Higher oil and gas prices take a toll

Gasoline prices increased 1.7% from February to March, the Bureau of Labor Statistics said. (This figure is adjusted to account for seasonal buying patterns.)

Average U.S. pump prices were $3.52 a gallon on April 1, up from $3.35 on March 4, according weekly data published by the Energy Information Administration.

Consumer prices rose 3.5% from a year ago in March, more than expected

The increase is largely attributable to higher oil prices. They’ve firmed amid a generally positive outlook for the global economy (meaning greater global oil demand) and controlled output among major oil-producing nations (meaning there hasn’t been a glut of oil), economists said.

Tensions in the Middle East may also be playing a role, Hamrick said.

Higher gas prices may filter through to higher prices elsewhere, since they factor into transportation and distribution costs for goods and even services like food delivery, he said.

Higher energy prices are what worries Zandi most relative to inflation readings. It’s likely the upward trend will continue in coming months, and the dynamic negatively impacts consumer buying power and sentiment, he said.

“Nothing does more damage to the economy more quickly than rising oil and gasoline prices,” he said.

Other ‘notable’ areas of inflation

In addition to shelter, motor vehicle insurance, medical care, recreation and personal care were “notable” contributors to “core” inflation (a reading that strips out volatile energy and food prices), the BLS said.

Shelter, motor vehicle insurance, medical care, apparel and personal care were notable contributors to monthly inflation from February to March, the agency said.

The overall monthly CPI reading, 0.4%, was much higher than the roughly 0.2% that would be expected on a consistently basis to bring inflation back to normal, economists said.

“There is no improvement here; we’re moving in the wrong direction,” Hamrick said.

“The usual trouble spots persist,” said Hamrick, who additionally called out costs for electricity and car maintenance and repairs.

Prices have fallen in some categories

Meanwhile, some consumer categories have seen improvement.

Prices fell for used cars and trucks, new vehicles and airline tickets between February and March, for example. They’re also down over the past year, by 2.2%, 0.1% and 7.1%, respectively, according to CPI data.

Lower prices for new and used cars should lead auto insurance and repair costs to fall as well, economists said.

Grocery prices are another bright spot, they said.

While some categories like eggs and pork chops have seen recent upward movement, the overall “food at home” index stood at 0% on a monthly basis in both February and March.

“Food prices have come to a standstill,” Zandi said. “For most Americans, the thing that bothers them the most about inflation is high food prices.”

Out-of-whack supply and demand

At a high level, supply-and-demand imbalances are what trigger out-of-whack inflation.

For example, the Covid-19 pandemic disrupted supply chains for goods. Americans’ buying patterns also simultaneously shifted away from services — like entertainment and travel — toward physical goods since they stayed at home more, driving up demand and fueling decades-high goods inflation.

Additionally, supply-and-demand dynamics in the labor market pushed wage growth to the highest level in decades, putting upward pressure on prices for services, which are more wage-sensitive.

Now that supply-chain issues are “pretty close to fixed,” there’s “little scope” for goods to contribute to disinflation moving forward, said Sarah House, senior economist at Wells Fargo Economics.

'Squawk on the Street' crew react to March's CPI report

“You need services to take the mantle of disinflation,” because goods have “petered out,” she added.

Housing falls in the services category. It accounts for the largest share of the consumer price index, so disinflation in this category would likely have a large impact on inflation readings.

So far, housing inflation has remained stubbornly high — even as economists have predicted it would start moderating any day given broadly positive trends in prices for new tenant rental leases, for example.

“It seems to be taking a bit longer than people thought,” said Andrew Hunter, deputy chief U.S. economist at Capital Economics.

“It’s coming,” he said. “It’s just a matter of when.”

Personal Finance

Social Security plans to cut about 7,000 workers. That may affect benefits

Published

8 hours ago

March 3, 2025

Business Finance News

The Social Security Administration office in Brownsville, Texas.

Robert Daemmrich Photography Inc | Corbis Historical | Getty Images

The Social Security Administration plans to shed 7,000 employees as the Trump administration looks for ways to cut federal spending.

The agency on Friday confirmed the figure — which will bring its total staff down to 50,000 from 57,000.

Previous reports that the Social Security Administration planned for a 50% reduction to its headcount are “false,” the agency said.

Nevertheless, the aim of 7,000 job cuts has prompted concerns about the agency’s ability to continue to provide services, particularly benefit payments, to tens of millions of older Americans when its staff is already at a 50-year low.

“It’s going to extend the amount of time that it takes for them to have their claim processed,” said Greg Senden, a paralegal analyst who has worked at the Social Security Administration for 27 years.

“It’s going to extend the amount of time that they have to wait to get benefits,” said Senden, who also helps the American Federation of Government Employees oversee Social Security employees in six central states.

Officials at the White House and the Social Security Administration were not available for comment at press time.

The Social Security Administration on Friday said it anticipates “much of” the staff reductions needed to reach its target will come from resignations, retirement and offers for Voluntary Separation Incentive Payments, or VSIP.

More reductions could come from “reduction-in-force actions that could include abolishment of organizations and positions” or reassignments to other positions, the agency said. Federal agencies must submit their reduction-in-force plans by March 13 to the Office of Personnel Management for approval.

Cuts may affect benefit payments, experts say

Former Social Security Administration Commissioner Martin O’Malley last week told CNBC.com that the continuity of benefit payments could be at risk for the first time in the program’s history.

“Ultimately, you’re going to see the system collapse and an interruption of benefits,” O’Malley said. “I believe you will see that within the next 30 to 90 days.”

Other experts say the changes could affect benefits, though it remains to be seen exactly how.

“It’s unclear to me whether the staff cuts are more likely to result in an interruption of benefits, or an increase in improper payments,” said Charles Blahous, senior research strategist at the Mercatus Center at George Mason University and a former public trustee for Social Security and Medicare.

Improper payments happen when the agency either overpays or underpays benefits due to inaccurate information.

Top Social Security official exits after refusing DOGE access to sensitive data

With fewer staff, the Social Security Administration will have to choose between making sure all claims are processed, which may lead to more improper payments, or avoiding those errors, which could lead to processing delays, Blahous said.

Disability benefits, which require more agency staff attention both to process initial claims and to continue to verify beneficiaries are eligible, may be more susceptible to errors compared to retirement benefits, he added.

Cuts may have minimal impact on trust funds

Under the Trump administration, Social Security also plans to consolidate its geographic footprint to four regions down from 10 regional offices, the agency said on Friday.

Ultimately, it remains to be seen how much savings the overall reforms will generate.

The Social Security Administration’s funding for administrative costs comes out of its trust funds, which are also used to pay benefits. Based on current projections, the trust funds will be depleted in the next decade and Social Security will not be able to pay full benefits at that time, unless Congress acts sooner.

The efforts to cut costs at the Social Security Administration would likely only help the trust fund solvency “in some miniscule way,” said Andrew Biggs, senior fellow at the American Enterprise Institute and former principal deputy commissioner of the Social Security Administration.

What President Donald Trump is likely looking to do broadly is reset the baseline on government spending and employment, he said.

“I’m not disagreeing with the idea that the agency could be more efficient,” Biggs said. “I just wonder whether you can come up with that by cutting the positions first and figuring out how to have the efficiencies later.”

Personal Finance

Student loan borrowers pursuing PSLF are ‘panicking.’ Here’s what to know

Published

9 hours ago

March 3, 2025

Business Finance News

Students walk through the University of Texas at Austin on February 22, 2024 in Austin, Texas.

Brandon Bell | Getty Images

As the Trump administration overhauls the student loan system, many borrowers pursuing the Public Service Loan Forgiveness program are worried about its future.

“There’s a lot of panicking by PSLF borrowers due to the uncertainty,” said higher education expert Mark Kantrowitz.

PSLF, which President George W. Bush signed into law in 2007, allows certain not-for-profit and government employees to have their federal student loans canceled after 10 years of payments.

Here’s what borrowers in the program need to know about recent changes affecting the program.

IDR repayment plan applications down

Some borrowers’ PSLF progress has stalled

While the legal challenges against SAVE were playing out, the Biden administration paused the payments for enrollees through a forbearance, as well as the accrual of any interest.

Unlike the payment pause during the pandemic, borrowers in this forbearance aren’t getting credit toward their required 120 payments for loan forgiveness under PSLF. It’s unclear when the forbearance will end.

But while the applications for other IDR plans remain unavailable, borrowers in SAVE are stuck on their timeline toward loan forgiveness, Kantrowitz said. If you were on an IDR plan other than SAVE, you will continue to get credit during this period if you’re making payments and working in eligible employment.

The Education Department is now tweaking the applications to make sure all their repayment plans comply with the new court order, an agency spokesperson told CNBC last week.

It will likely be months before the Department has reworked all the applications and made them available again, Kantrowitz said.

Those who switch to the Standard plan will continue to get PSLF credit, but the payments are often too high for those working in the public sector or for a nonprofit to afford, experts said.

‘Buy back’ opportunity can help

While it’s frustrating not to be inching toward loan forgiveness for the time being, an option down the road may help, said Betsy Mayotte, president of The Institute of Student Loan Advisors, a nonprofit.

The Education Department’s Buyback opportunity lets people pay for certain months that didn’t count, if doing so brings them up to 120 qualifying payments.

For example, time spent in forbearances or deferments that suspended your progress can essentially be cashed in for qualifying payments.

The extra payment must total at least as much as what you have paid monthly under an IDR plan, according to Studentaid.gov.

Borrowers who’ve now been pursuing PSLF for 10 years or more should put in their buyback request sooner than later, Kantrowitz said.

“The benefit is likely to be eliminated by the Trump administration,” he said.

Keep records

Borrowers have already long complained of inaccurate payment counts under the PSLF program. While the student loan repayment options are tweaked, people could see more errors, Kantrowitz said.

“A borrower’s payment history and other student loan details are more likely to get corrupted during a transition,” he said.

As a result, he said, those pursuing PSLF should print out a copy of their payment history on StudentAid.gov.

“It would also be a good idea to create a spreadsheet showing all of the qualifying payments so they have their own count,” Kantrowitz said.

With the PSLF help tool, borrowers can search for a list of qualifying employers and access the employer certification form. Try to fill out this form at least once a year, Kantrowitz added.

Personal Finance

Treasury Department halts enforcement of BOI reporting for businesses

Published

12 hours ago

March 3, 2025

Business Finance News

The US Treasury building in Washington, DC, US, on Monday, Jan. 27, 2025.

Stefani Reynolds | Bloomberg | Getty Images

The U.S. Department of the Treasury on Sunday announced it won’t enforce the penalties or fines associated with the Biden-era “beneficial ownership information,” or BOI, reporting requirements for millions of domestic businesses.

Enacted via the Corporate Transparency Act in 2021 to fight illicit finance and shell company formation, BOI reporting requires small businesses to identify who directly or indirectly owns or controls the company to the Treasury’s Financial Crimes Enforcement Network, known as FinCEN.

After previous court delays, the Treasury in late February set a March 21 deadline to comply or risk civil penalties of up to $591 a day, adjusted for inflation, or criminal fines of up to $10,000 and up to two years in prison. The reporting requirements could apply to roughly 32.6 million businesses, according to federal estimates.

The rule was enacted to “make it harder for bad actors to hide or benefit from their ill-gotten gains through shell companies or other opaque ownership structures,” according to FinCEN.

In addition to not enforcing BOI penalties and fines, the Treasury said it would issue a proposed regulation to apply the rule to foreign reporting companies only.

President Donald Trump praised the news in a Truth Social post on Sunday night, describing the reporting rule as “outrageous and invasive” and “an absolute disaster” for small businesses.

Other experts say the Treasury’s decision could have ramifications for national security.

“This decision threatens to make the United States a magnet for foreign criminals, from drug cartels to fraudsters to terrorist organizations,” Scott Greytak, director of advocacy for anticorruption organization Transparency International U.S., said in a statement.

Greg Iacurci contributed to this reporting.