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Overall consumer prices dropped 0.3 percent in March on a seasonally adjusted basis, which NAFCU Chief Economist and Director of Research Curt Long attributed in part to a drop in gas prices.

"The decline was driven by lower gasoline prices, which decreased 6.2 percent during the month," Long wrote in a Macro Data Flash analyzing the Bureau of Labor Statistics data. "Lower apparel and vehicle prices contributed to the decrease. Prices for wireless telephone services also fell sharply during the month.

"Despite this weak report, inflation has been trending up lately overall, and June remains a distinct possibility for the Fed's next rate hike," he continued. "However, if next month's inflation reading is as weak as this one, that would cast serious doubts on those prospects."

Food prices increased 0.3 percent due to rising fruit and vegetable prices. Energy prices overall decreased 2.3 percent.

The overall consumer price index increased 2.4 percent year-over-year, but core CPI inflation (excluding food and energy) dropped for the first time in 7 years, hitting 2 percent.