Soaring energy costs helped push US consumer prices up a steep 0.4 per cent last month, while rising apparel prices spurred core inflation more than expected, a government report showed today.
The overall increase in the Labor Department's consumer price index for March matched expectations on Wall Street, but a 0.3 per cent rise in prices excluding food and energy was a bit swifter than forecast.
The department pinned 70 per cent of the gain in the core price index on rising costs for apparel and shelter, which is housing excluding utility and furniture costs.
Apparel prices, which had dropped 1 per cent in February, moved 1 per cent higher in March. Shelter costs, which account for nearly one-third of the overall CPI, rose a firm 0.4 per cent for a second month in a row.
The report could raise some questions about whether the Federal Reserve will call a halt to a cycle of interest rate increases after the next policy meeting in May, particularly with oil costs striking record highs in recent days.
Despite the sharper-than-anticipated increase in core prices, the 12-month change held steady at 2.1 per cent. The 12-month rate of overall consumer price inflation decelerated to 3.4 per cent from the 3.6 per cent rise registered in the period through February.
Energy costs shot up 1.3 per cent last month, reversing a 1.2 per cent February drop. Gasoline prices increased 3.6 per cent, while natural gas costs fell 4.3 per cent. Gasoline prices have continued to move higher this month.
The rise in consumer prices ate into Americans' spending power, with inflation-adjusted earnings falling 0.3 per cent in March.