The consumer prices in the United States surged in March for a second consecutive month on increasing costs of housing and gasoline, signaling of an uptick in country’s inflation that should keep the US Federal Reserve Bank on course to begin hiking interest rates this year.
The Labor Department report, released on Friday, showed that the Consumer Price Index (CPI) rose 0.2 percent in March after recording a similar gain in February. The CPI dropped 0.1 percent in the 12 months through March after remaining unchanged in February.
The core CPI, which strips out energy and food costs, rose 0.2 percent last month after a similar increase in February. In the 12 months through March, the core CPI increased 1.8 percent. This was the largest surge reported since October last year.
The broad-based price gains in March bolstered the long-held view of the US central bank that the country’s inflation will gradually move toward its two percent target as the damaging effect of the lower energy prices begins to fade.
RBS chief economist Michelle Girard said, “The data should allay the disinflation concerns that predominated earlier this year and, on the margin, increase the Fed’s confidence that inflation will eventually move toward its target.”
Even though a price measure that is being tracked by the Federal Reserve is running lower than the so-called core CPI, a number of Fed officials seem optimistic about an increase in key rates at the policy-setting meeting in June.
The Federal Reserve has kept its overnight rates of interest near zero since December 2008.
The US dollar increased against a basket of global currencies. The US stocks declined sharply on investors’ woes over a clamp-down on margin trading in China as well as a number of depressing earnings reports from American corporations. The US government debt prices were recorded slightly weaker.