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Core Inflation Hits 3.2% in March; Q1 GDP Grows 2%

The Commerce Department reported that the core personal consumption expenditures price index rose to 3.2% year-over-year in March, matching market expectations. Overall inflation, including volatile components, reached 3.5% annually. Furthermore, the nation's Gross Domestic Product (GDP) expanded by 2% in the first quarter. While this marks an improvement over the previous quarter's 0.5% growth, it fell short of analyst predictions of 2.2%. These figures arrive as consumers navigate rising costs influenced by geopolitical events affecting energy prices.

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Core Inflation Hits 3.2% in March; Q1 GDP Grows 2%

Economic data released Thursday showed core inflation accelerating to 3.2% year-over-year in March, while first-quarter GDP grew by 2%, aligning with mixed market expectations.

Inflation Metrics Report

The Commerce Department released key inflation figures, indicating persistent price pressures on consumers. The data was reported as follows:

  • Core PCE Index: The core personal consumption expenditures price index, which excludes volatile food and energy costs, accelerated by a seasonally adjusted 0.3% for March. This brought the 12-month core inflation rate to 3.2%, matching the consensus estimates from Dow Jones.
  • Overall CPI: When including fluctuating components like gas and groceries, the overall Consumer Price Index (CPI) saw a monthly increase of 0.7%, resulting in an annual rate of 3.5%, which also aligned with forecasts.

Quarterly GDP Performance

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In separate economic news, the Commerce Department reported the nation's Gross Domestic Product (GDP) performance for the first quarter. The economy grew at a seasonally adjusted annualized pace of 2%.

This growth figure represented:

  • An increase compared to the 0.5% growth recorded in the fourth quarter of 2025.
  • A figure lower than the previously estimated rate of 2.2% for the quarter.

Market Context

These economic indicators were released amid consumer concerns regarding escalating prices, partly attributed to global factors such as the impact of the Iran conflict on oil prices.

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