The inflation figures will likely reinforce warnings that the Federal Reserve needs to consider raising interest rates if price pressures do not ebb.

The figures show how the impact of the Iran war is hitting the U.S. economy as energy costs surge.

The U.S. merchandise trade deficit with China, Canada, and Vietnam widened for a third month. The U.S. gap with Mexico narrowed slightly.

Manufacturing output, which accounts for three-fourths of total industrial production, slipped 0.1% after a stronger advance in February than initially reported.

However, the cost of processed goods for intermediate demand rose by the most in nearly four years, boosted by rising energy and food costs.

The core PCE price index, the Fed's preferred inflation gauge, rose 3% year-over-year in February.

On average, payrolls rose 68,000 in the first three months of 2026, the strongest run in almost a year.

"You're never going to completely change the narrative with one report, but I think it does call into question just how firm is that stabilization?"