MW: U.S. consumer prices up 0.1% in March, matching forecasts
Weather boosts costs for fruit and vegetables; core CPI rate's unchanged
WASHINGTON (MarketWatch) -- U.S. consumer prices rose 0.1% on a seasonally adjusted basis in March due mainly to an increase in costs for fresh fruits and vegetables, the Labor Department reported Wednesday.
The increase matched expectations of economists surveyed by MarketWatch. The government's core consumer price index -- measuring the rate of retail-level inflation after excluding food and energy -- was unchanged in March, while analysts had expected a 0.1% increase.
During March, overall food prices rose 0.2%. Bad weather pushed up fresh fruits and vegetables prices, which rose 4.6%.
Energy prices were unchanged in March, while shelter prices were down 0.1% on the month.
In the past year, the CPI has risen 2.3%. The core rate is up 1.1% over the same interval, the smallest gain since early 2004.
The last time the year-over-year core increase was smaller was in January 1966, the government said.
Later Wednesday, Federal Reserve Chairman Ben Bernanke will testify before the Joint Economic Committee on Capitol Hill. He's expected to flesh out his views on economic matters, explaining why he's been unwilling to raise interest rates quite yet for fear of choking off the recovery.
Some observers have been worried about deflation, as the core rate hovers near the lower end of the Federal Reserve's target of 1% to 2%.
However, analysts say housing costs are behind much of the deceleration in inflation.
"The deceleration in core prices has been driven by a collapse in shelter costs," wrote Eric Green, chief U.S. strategist for TD Securities, in a research note prior to the March data's release on Wednesday.
March data details
Indeed, falling shelter costs have worked to keep consumer inflation down. Shelter costs -- which account for more than 32% of the CPI -- have fallen 0.6% over the past year.
In March, gasoline prices fell 0.8%, while natural gas dropped 0.7%. Electricity rose 2.1%.
Dairy prices were unchanged, while prices for meats, poultry, fish and eggs rose 0.2%.
Inflation-adjusted average hourly earnings fell 0.2% in March, on a seasonally adjusted basis, as prices rose.
Medical care prices rose 0.3% in March. Prescription drug prices increased 0.6%.
Apparel costs decreased 0.4%, while recreation costs fell 0.1%.
New-vehicle prices rose 0.1%, while airfares showed a 0.4% increase.
