Core inflation rate hit 3.2% in March, as expected; GDP grew 2% in first quarter

Consumers faced escalating prices in March as the Iran war sent oil soaring and created a new level of challenges for the Federal Reserve.

The core personal consumption expenditures price index, which excludes food and energy, accelerated a seasonally adjusted 0.3% for the month, pushing the 12-month inflation rate to 3.2%, the Commerce Department reported Thursday. The readings matched the Dow Jones consensus estimates.

Including the volatile gas and groceries components saw higher readings, with the monthly gain at 0.7% and the annual rate hitting 3.5%, also in line with forecasts.

In other economic news Thursday, the Commerce Department reported that gross domestic product grew at a 2% seasonally adjusted annualized pace in the first quarter, up from 0.5% in the fourth quarter of 2025 but lower than the 2.2% estimate.