U.S. Consumer Prices Climb 0.4% Amid Spike In Energy Prices
Reflecting a spike in energy prices, the Labor Department released a report on Wednesday showing consumer prices in the U.S. increased by slightly more than anticipated in the month of March.
The Labor Department said its consumer price index climbed by 0.4 percent in March after edging up by 0.2 percent in February. Economists had expected the index to rise by 0.3 percent.
Consumer prices showed their biggest monthly increase in over a year, as energy prices soared by 3.5 percent in March after rising by 0.4 percent in February. Gasoline prices led the way higher, skyrocketing by 6.5 percent.
Excluding the jump in energy prices and a modest increase in food prices, core consumer prices inched up by 0.1 percent in February, matching the uptick seen in the previous month. Core prices had been expected to tick up by 0.2 percent.
Increases in prices for shelter, medical care, new vehicles, recreation, education, and tobacco were partly offset by lower prices for apparel, used cars and trucks, and airline fares.
With the monthly increase, the Labor Department said the annual rate of consumer price growth accelerated to 1.9 percent in March from 1.5 percent in February.
On the other hand, the report said the annual rate of growth in core consumer prices slowed to 2.0 percent from 2.1 percent.
Andrew Hunter, Senior U.S. Economist at Capital Economics, said the slowdown in core price growth to a 13-month low “underlines that there is little chance of inflation breaking out above the Fed’s target any time soon.”
“We continue to expect that weaker activity growth will convince officials to start cutting interest rates before the end of the year,” Hunter added.
On Thursday, the Labor Department is scheduled to release a separate report on producer prices in the month of March.
Producer prices are expected to rise by 0.3 percent in March after inching up by 0.1 percent in February, while core prices are expected to edge up by 0.2 percent after a 0.1 percent uptick in the previous month.
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