Higher energy prices raised March inflation as they did in February. The Commerce Department indicated that the Consumer Price Index rose 0.5% in March following a like gain in February. The increase matched Consensus expectations. The y/y price rise of 2.7% was the strongest since December 2009 and the three-month increase of 6.1% (AR) was the firmest since mid-2008. Core price inflation showed less forward momentum. The CPI less food & energy rose 0.1% but the gain fell short of an expected 0.2% rise. Nevertheless, the y/y increase of 1.2% was the firmest since last February and the 2.0% three-month increase was the strongest since late-2009.

Energy prices again led with a 3.5% increase. Home heating oil prices increased 6.2% (34.0% y/y) while gasoline prices rose 5.6% (27.5% y/y). Prices for natural gas & electricity ticked up 0.2% but fell 0.5% y/y. Food & beverage prices rose a strong 0.7%. The gain was raised by a 1.1% increase in meat, poultry, fish & eggs (7.9% y/y) and by a 1.3% gain (3.7% y/y) in dairy products.

For goods alone, core prices rose 0.1% led by a 0.8% increase in motor vehicles (1.3% y/y). Apparel prices fell 0.5% (-0.6% y/y) for the second down month while prices for household furnishings & operation slipped 0.1% (-1.6% y/y).

Pricing power for core services improved again, posting a 0.2% (1.6% y/y) increase. Higher public transportation costs continued to lead with a 1.3% increase (10.5% y/y). Education costs rose 0.3% (4.0% y/y) while medical care service prices ticked up 0.1% (2.7% y/y). Shelter costs, which are 32% of the CPI, rose 0.1% for the sixth straight month and the y/y change improved to 0.9% due to declines early last year. Owners equivalent rent of primary residences, a measure not equivalent to other house price measures, again nudged up 0.1% while the y/y increase improved to 0.8% after no change last year. Nevertheless, the reading remained nearly the weakest since the series' start in 1983.

The chained CPI, which adjusts for shifts in consumption patterns, jumped 0.9% and 2.5% year-to-year. Chained prices less food & energy increased 0.3% m/m and by 0.9% y/y.

The consumer price data is available in Haver's USECON database while detailed figures can be found in the CPIDATA database. The expectations figure is the AS1REPNA database.