Inflation slowed for a ninth straight month in March amid drops in both gasoline and grocery price.

But an underlying inflation measure that better reflects long-term trends accelerated on another surge in rent.  

Consumer prices increased 5% from a year earlier, down from 6% in February and a 40-year high of 9.1% last June, according to the Labor Department’s consumer price index. 

That’s the smallest annual gain since May 2021.

Inflation cooled in March as the Federal Reserve’s interest rate increases showed more impact, the Labor Department reported Wednesday.

The consumer price index, a widely followed measure of the costs for goods and services in the U.S. economy, rose 0.1% for the month against a Dow Jones estimate for 0.2%, and 5% from a year ago vs. the estimate of 5.1%.

Excluding food and energy, core CPI increased 0.4% and 5.6% on an annual basis, both as expected.

Inflation showed welcome signs of cooling in March as the cost of gasoline declined, but core prices pointed to strong underlying price pressures that are still bubbling beneath the surface.

The Labor Department said Wednesday that the consumer price index, a broad measure of the price for everyday goods including gasoline, groceries and rents, rose 0.1% in March from the previous month. Prices climbed 5% on an annual basis. Those figures were both lower than forecasts by Refinitiv economists. 

Gasoline prices are likely to increase ahead of peak driving season as a result of the announcement Monday that several oil-rich nations will cut oil production, multiple analysts told FOX Business.

On Monday, the Organization of the Petroleum Exporting Countries (OPEC) announced massive oil production cuts in a potential blow to global energy markets. As part of the announcement, OPEC members, led by Saudi Arabia and joined by Iraq, the United Arab Emirates, Kuwait and other Middle Eastern countries, will reduce oil drilling by about 1.16 million barrels per day.

Crude prices surged in early trading Monday after a surprise announcement by Saudi Arabia and other major oil produces to slash output by more than a million barrels a day. The move is all but certain to send gas prices higher, adding another wrinkle to broader efforts to rein in inflation.

Global oil prices surged early on Monday, after markets were surprised by the announcement of an unexpected cut to crude output by the oil-exporting OPEC+ group of nations a day earlier.

Futures of global benchmark Brent crude rose to $84.19 per barrel—its highest level in nearly a month—up more than 5.3% from Friday.

The domestic West Texas Intermediate futures rose above $81 per barrel before settling at $79.69, or 5.38% higher than Friday.

President Biden is doubling down on his push for an economy-wide transition to clean energy sources like wind and solar even as energy prices soar in response to global fossil fuel production cuts.

A first-in-the-nation bill to punish oil companies for profiting from price spikes at the pump breezed through the California Senate on Thursday at the urging of Gov. Gavin Newsom, the first major vote in an effort to pass the law by month’s end.

Elevated inflation cooled modestly in February, as the Federal Reserve faces dual threats of rising prices and financial instability.

The consumer-price index, a closely watched inflation gauge, rose 6% in February from a year earlier, versus a 6.4% gain the prior month, the Labor Department said Tuesday, the slowest pace since September 2021. The smaller increase comes as the Fed contemplates its next interest rate move while confronting price pressures and bank failures.

Inflation remains elevated but the temperature is coming down, according to the latest Consumer Price Index.

The closely watched gauge of inflation, released Tuesday morning, showed that annual price increases continued to slow in February.

CPI measured 6% for the year ended in February, down from January’s 6.4% and in line with economists’ expectations.

On a monthly basis, prices were up 0.4%, representing a cooldown from the January monthly growth rate of 0.5%. Economists were expecting a gain of 0.4%.