US consumer prices ticked higher in March, lifted by a rebound in energy prices, the Labor Department reports. The consumer price index (CPI) rose 0.2 per cent for the second month in a row in March, weaker than the 0.3 per cent increase expected by analysts, the department reported on Friday. Year over year, inflation dipped back into negative territory with a 0.1 per cent fall. In January inflation had turned negative for the first time since 2009. The CPI number month over month was pulled hi
gher by a 1.1 per cent rise in energy prices, including a 3.9 per cent jump in petrol, and a 1.2 per cent gain for used cars and trucks.
Food prices slipped 0.2 per cent.
Stripping out food and energy prices, the so called “core” CPI rose 0.2 per cent from February, double the increase expected. It was up 1.8 per cent from March 2014, marking a slight increase from the 1.7 per cent rise for the 12 months ending February.
The inflation snapshot came as the Federal Reserve debates its first interest rate increase since 2006. The central bank has signalled it could raise the near zero federal funds rate as early as June.
The CPI data typically runs a little higher than the Fed’s preferred inflation measure, the personal consumption expenditures price index.
The core PCE price index, excluding food and energy, rose 1.4 per cent in February from a year ago, well below the Fed’s 2.0 per cent inflation target.
Andrew Davis of Moody’s Analytics, said the report showed that the US economy’s disinflationary woes had passed but price pressures remained weak.
“Inflation is gradually moving in the right direction but the March CPI doesn’t alter our expectations for the Fed to wait until September” for the rate hike, he said.
AFP
