March inflation increased 3.3% year over year, according to the latest data from the Bureau of Labor Statistics. This is up from February, which saw only a 2.4% increase year over year. The rising inflation rate was in line with economists’ expectations as it is the first inflation report to reflect impacts from the conflict in Iran.
Despite high energy prices driving inflation, rising 10.9% month over month, March still saw significant deflation in staple grocery prices and a 0.3% rise in real average hourly earnings year over year. With the prices of necessities decreasing in March and wage increases outpacing inflation, Americans will see more savings as Trump’s anti-inflation agenda targets key areas.
Those struggling to make ends meet or having trouble putting food on the table got some relief in these key areas in March:
- Cereals and baked goods (-0.6%)
- Potatoes (-2.8%)
- Ground beef (-1.2%)
- Bacon and breakfast sausages (-1.7%)
- Eggs (-3.4%)
- Dairy (-0.6%)
With average monthly grocery costs for a family of four reaching $1,000, any relief on the essentials of meat, dairy, and eggs will help the family budget. Ground beef saw the largest month-over-month drop in price since November 2023, just in time for grilling season. Beef prices have been increasing steadily since April 2025, so a break in price increases is a welcome sight. Eggs have seen the largest deflation rate on this list of groceries, but they have steadily been decreasing since March 2025. Dairy also continues to decrease for the second month in a row.
Beyond grocery prices, deflation is also hitting medical necessities. Medical care prices decreased 1.0%, with prescription drug prices dropping 1.5%. Home health care has decreased 1.9%, with health insurance decreasing 1.4%. These items will continue to see deflation in the future thanks to landmark healthcare price transparency reforms from the Trump administration.
The Beige Book
Other economic news has also been positive lately. The Federal Reserve released the April edition of the Beige Book, a summary of the overall economic activity in the 12 Federal Reserve Districts.
Despite uncertainty surrounding the Iran conflict, manufacturing activity rose, labor markets have been steady, and wages have continued to rise at a moderate pace. The economy continues to grow steadily in all districts, with consumer spending even increasing in the face of harsh weather and rising gas prices.
Although businesses are hesitant to hire, several Federal Reserve Districts saw an increase in demand for temporary or contract workers. The flexibility of this kind of work not only benefits the workers, but it also helps businesses that are not in a position to hire permanently. Increased demand for independent contractors during seasons of uncertainty also helps those families who want to take on extra work. This alternative work arrangement uniquely benefits women who seek that flexibility in order to prioritize caring for their families as well as furthering their careers.
Bottom Line
Trump’s anti-inflation policies are making a difference, and we will continue to see progress as policies target key areas. Despite the uncertainty many Americans feel with ongoing global conflicts, the U.S. economy continues to grow, and consumers are even saving some money with grocery prices dropping—an important cushion against high energy prices.