The rate of inflation year-over-year fell to 5.0 percent last month from 6.0 percent in February, the smallest 12-month increase since May 2021, according to the Bureau of Labor Statistics.
The report showed a 0.1 percent increase in March over the prior month on a seasonally adjusted basis, much lower than the 0.4 percent reading in February and also below the 0.3 percent that had been expected by analysts.
The report is the latest evidence that the Fed's streak of interest rate hikes over the last year is weighing on economic activity.
While US labor market data has remained solid, recent reports on manufacturing and the services sector have shown signs of slowing.
Chief among the factors in the milder inflation number was a significant drop in energy prices, offset by higher costs for housing.
Food prices were mixed in the quarter, with prices for meats, poultry and fish falling, while cereals, bakery products and nonalcoholic beverages climbed.
US March Consumer Inflation Eases
FILE: A man arranges produce at Best World Supermarket in the Mount Pleasant neighborhood of Washington, D.C., U.S., August 19, 2022.
NEW YORK - US consumer inflation slowed in March, according to US data Wednesday, lessening the pressure on the Federal Reserve to maintain its aggressive posture to cool the economy.