Consumer prices buoyed by rising fuel costs in March
US consumer prices rose for a second straight month in March as the cost of gasoline and shelter increased, signs of some inflation that should keep the Federal Reserve on course to start raising interest rates this year.The Labor Department's Consumer Price Index increased 0.2 percent last month.
A motorist refuels his vehicle at a Westar gas station in Miami. A rise in gas costs and shelter lifted consumer prices in March, the Labor Department said Friday, April 17, 2015.
Lynne Sladky/AP/File
U.S. consumer prices rose for a second straight month in March as the cost of gasoline and shelter increased, signs of some inflation that should keep the Federal Reserve on course to start raising interest rates this year.
The Labor Department said on Friday its Consumer Price Index increased 0.2 percent last month after a similar gain in February. Price increases were fairly broad-based in March, suggesting the recent disinflationary trend had run its course.
In the 12 months through March, the CPI slipped 0.1 percent after being unchanged in February.
Economists polled by Reuters had expected the CPI to rise 0.3 percent from February and unchanged from a year ago.
"Core goods prices have been rising for two consecutive months now, against expectations of modest declines, and have provided some support to core CPI on top of the solid services inflation," Barclays Research economist Blerina Uruci wrote in an e-mailed analysis. "However, we maintain that the headwind from the stronger dollar and second-round effects of lower energy prices are still ahead of us and are likely to weigh in inflation in the coming months."
March's price gains are likely to bolster the Fed's long-held view that inflation will gradually move towards the U.S. central bank's 2 percent target as the dampening effect of lower energy prices fades.
The Fed has kept overnight interest rates near zero since December 2008, but a number of officials have said a rate hike will likely be considered at the June policy-setting meeting.
But a recent raft of weak economic data, including March nonfarm payrolls, has left many economists believing monetary policy tightening will not happen before September.
The so-called core CPI, which strips out food and energy costs, increased 0.2 percent in March after a similar rise in February. In the 12 months through March, the core CPI rose 1.8 percent, the largest increase since October.
Gasoline prices rose 3.9 percent, the largest increase since February 2013, after rising 2.4 percent in February. Food prices slipped 0.2 percent last month.
Elsewhere, shelter costs rose 0.3 percent. That, together with higher energy prices, accounted for much of the gain in the CPI last month.
Further gains in the cost of shelter are likely in the months ahead, given rising demand for rental accommodation.
There were increases in prices of new motor vehicles, used cars and trucks and medical care services. Apparelprices rose as did prices for household furnishings and operations. Airline fares fell 1.7 percent.