gas pump

Trends: Gas Effects Rise in Consumer Prices

U.S. consumer prices climbed 0.4% in March, an increase caused mostly by higher costs for gasoline, electricity and shelter.

This story by Josh Boak appeared in Yahoo! Finance.

The Labor Department said Wednesday that the consumer price index rose a healthy 1.9% last month from a year ago, a sharp jump from the annual pace of 1.5% in February.

Inflation has been relatively modest even as the job market has strengthened and wage gains have accelerated over the past several years. The Trump administration has been highlighting the meager inflation as the president calls on the Federal Reserve to cut a key short-term interest rate.

But consumer prices in March suggested that the Fed can remain patient, as the figures were essentially near its 2% target.

“Overall, the March CPI data is another month of goldilocks inflation,” said Leslie Preston, a senior economist at TD Bank. “Not too hot that the Fed needs to reevaluate its pause, and not so cold that it needs to consider easing policy.”

Still, inflation in the form of commodity prices for gasoline and electricity roared in March, eating into wage growth. Average hourly wages have increased 1.3% in the past year, down from an annual gain of 1.9% in February.

Roughly 60 percent of inflation last month came from a 3.5% increase in energy prices.

Got a news tip? Contact David MacNeal