15 April 2014, 17:42  Consumer prices in the U.S. rise by slightly more than expected

Consumer prices in the U.S. rose by slightly more than expected in the month of March, according to a report released by the Labor Department on Tuesday, with the growth largely reflecting higher prices for food and shelter. The Labor Department said its consumer price index rose by 0.2 percent in March after inching up by 0.1 percent in each of the two previous months. Economists had been expecting another 0.1 percent increase. The bigger than expected increase in consumer prices was partly due to continued growth in food prices, which rose by 0.4 percent for the second consecutive month. The index for meats, poultry, fish, and eggs posted the largest increase, rising 1.2 percent, while the index for dairy and related products increased by 1.0 percent. Meanwhile, the report showed that energy prices edged down by 0.1 percent in March after falling by 0.5 percent in February. The Labor Department said gasoline prices dropped by 1.7 percent, while the fuel oil index tumbled by 2.9 percent. On the other hand, the index for natural gas jumped 7.5 percent. The core consumer price index, which excludes food and energy prices, rose by 0.2 percent in March after ticking up by 0.1 percent for three straight months. Core prices had been expected to inch up by 0.1 percent once again. Almost two-thirds of the increase by the core index reflected higher shelter prices, which rose by 0.3 percent in March after climbing by 0.2 percent in February. The Labor Department said the indexes for rent and owners' equivalent rent both rose by 0.3 percent, while the index for lodging away from home surged up by 1.5 percent. Along with the higher shelter prices, the increase in core prices also reflected higher prices for medical care, apparel, used cars and trucks, and airline fares. Meanwhile, the report showed that the indexes for household furnishings and operations and recreation both declined in March. Compared to the same month a year ago, consumer prices were up by 1.5 percent in March, reflecting a notable acceleration from the 1.1 percent growth seen in February. Core consumer prices increased at an annual rate of 1.7 percent in March compared to the 1.6 percent increase in the previous month. Paul Dales, Senior U.S. Economist at Capital Economics, said, "The rebound in U.S. CPI inflation, to 1.5% in March from 1.1%, is partly due to the reversal of the favorable base effects that pushed it down in February." "Nonetheless, longer-lasting trends will push both headline and core inflation close to 2% before long," he added. Last Friday, the Labor Department released a separate report showing that producer prices rose by much more than expected in the month of March. The Labor Department said its producer price index for final demand advanced by 0.5 percent in March after edging down by 0.1 percent in February. Economists had been expecting the index to tick up by 0.1 percent. Core producer prices also rose by 0.6 percent in March following a 0.2 percent drop in the previous month. Core prices had been expected to rise by 0.2 percent. Producer prices for final demand and core producer prices both rose at annual rates of 1.4 percent in March, notably faster than in the previous month.

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