While the Labor Department released a report on Friday showing another modest increase in U.S. consumer prices in the month of March, prices rose by slightly less than economists had anticipated.
The Labor Department said its consumer price index edged up by 0.2 percent in March, matching the increase seen in February. Economists had expected the index to rise by 0.3 percent.
The continued increase in prices was partly due to another notable increase in energy prices, which rose by 1.1 percent in March after climbing by 1.0 percent in February.
The gasoline index showed its biggest increase since February of 2013, surging up by 3.9 percent, while the fuel oil index also jumped by 5.9 percent.
However, the increase in energy prices was partly offset by a drop in food prices, as the food index fell by 0.2 percent in March after rising by 0.2 percent in February.
The Labor Department said five of the six major grocery store food group indexes declined, led by the fruits and vegetables index.
Meanwhile, the report said core consumer prices, which exclude food and energy prices, rose by 0.2 percent for the third consecutive month. The uptick in core prices matched economist estimates.
The increase in core prices was partly due to higher prices for shelter, as the shelter index climbed by 0.3 percent in March after rising by 0.2 percent in February.
Prices for medical care, used cars and trucks, apparel, new vehicles, household furnishings and operations, and recreation also increased.
Compared to the same month a year ago, the headline consumer price index edged down by 0.1 percent in March after coming in unchanged in February.
At the same time, the annual rate of core consumer price growth ticked up to 1.8 percent in March from 1.7 percent in February. The core price growth is more closely watched by the Federal Reserve.
Rob Carnell, chief international economist at ING, said, "Given recent activity data weakness, which has seemed to all but rule out a June rate hike, this data adds an additional, but unhelpfully contradictory inflation element to the rate hike timing debate."
"That said, it will need corroboration by activity data soon if it is not to be too late for a June hike, and that point of no return may have already been passed," he added.
On Tuesday, the Labor Department released a separate report showing that producer prices rose for the first time in five months in March.
The Labor Department said its producer price index for final demand rose by 0.2 percent in March after falling by 0.5 percent in February. The increase in prices matched economist estimates.
Core producer prices, which exclude food and energy prices, also rose by 0.2 percent in March following a 0.5 percent drop in the previous month. Economists had expected core prices to tick up by 0.1 percent.
Despite the monthly increase, the Labor Department noted that producer prices in March were down by 0.8 percent compared to the same month a year ago. Prices were down by 0.6 percent year-over-year in February.
The report also said the annual rate of core producer price growth slowed to 0.9 percent in March from 1.0 percent in the previous month.
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