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Gasoline, shelter costs lift US consumer prices
[WASHINGTON] US consumer prices rose for a second straight month in March as the cost of gasoline and shelter increased, signs of some inflation that should keep the Federal Reserve on course to start raising interest rates this year.
The Labor Department said on Friday its Consumer Price Index increased 0.2 per cent last month after a similar gain in February. Price increases were fairly broad-based in March, suggesting the recent disinflationary trend had run its course.
In the 12 months through March, the CPI slipped 0.1 per cent after being unchanged in February.
Economists polled by Reuters had expected the CPI to rise 0.3 per cent from February and unchanged from a year ago.
March's price gains are likely to bolster the Fed's long-held view that inflation will gradually move towards the US central bank's 2 per cent target as the dampening effect of lower energy prices fades.
The Fed has kept overnight interest rates near zero since December 2008, but a number of officials have said a rate hike will likely be considered at the June policy-setting meeting.
But a recent raft of weak economic data, including March nonfarm payrolls, has left many economists believing monetary policy tightening will not happen before September.
The so-called core CPI, which strips out food and energy costs, increased 0.2 per cent in March after a similar rise in February. In the 12 months through March, the core CPI rose 1.8 per cent, the largest increase since October.
Gasoline prices rose 3.9 per cent, the largest increase since February 2013, after rising 2.4 per cent in February. Food prices slipped 0.2 per cent last month.
Elsewhere, shelter costs rose 0.3 per cent. That, together with higher energy prices, accounted for much of the gain in the CPI last month.
Further gains in the cost of shelter are likely in the months ahead, given rising demand for rental accommodation.
There were increases in prices of new motor vehicles, used cars and trucks and medical care services. Apparel prices rose as did prices for household furnishings and operations. Airline fares fell 1.7 per cent.