Economy Food, gas costs push consumer prices higher

WASHINGTON (AP) -- U.S. consumers paid more last month for food and gas. But outside those volatile categories inflation was mild.

The consumer price index rose 0.3 percent in March, the Labor Department said Friday. That's slower than February's 0.4 percent rise.

Gas prices increased at a slower pace than the previous month. Excluding food and gas, so-called "core" prices increased 0.2 percent in March.

Inflation has eased since last fall and is expected to stay mild. In 12 months that ended in February, prices rose 2.7 percent. That's below last year's peak year-over-year rate of 3.9 percent.

Core prices have risen 2.3 percent in the 12 months that ended in February, close to the Federal Reserve's inflation target of 2 percent.

Mild price increases leave consumers with more money to spend, which boosts economic growth. Lower inflation also gives the Fed more leeway to keep interest rates low.

Food prices ticedk up last month but are moderating after sharp increases last year. Gas prices are high but are starting to level off.

And even though hiring has picked up, wages have barely kept pace with inflation. So many retailers can't charge more without losing some business.

A small amount of inflation can be good for the economy.

Published: Mon, Apr 16, 2012

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