Prices across the economy fell to an annual increase of 5 percent, down from 6 percent annually in February, according to data from the Labor Department.

On a monthly basis, inflation rose 0.1 percent after rising 0.4 percent in February and 0.5 percent in January.

Economists had been expecting inflation to land at 5.1 percent annually and for it to have increased by 0.2 percentage points in March, so the numbers are better than expectations.

Inflation has been coming down since the middle of last year when it topped out at 9.1 percent in June following a quantitative tightening program by the Federal Reserve.

The Fed has raised interest rates nine times in a row since last March in the fastest tightening cycle since the last time inflation spiked during the Nixon administration.

But Fed officials have been sending different signals about what the U.S. central bank should do next.

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