Consumer prices post biggest increase since June '09
Consumers paid more for food, gas and rent last month, but outside those categories inflation remained tame. The Labor Department says the Consumer Price Index rose five-tenths of a percent in March. That matched February's increase, the largest since the recession ended in June 2009.
In the past 12 months, the index has increased two-point-seven percent, the biggest rise since December 2009.
Outside volatile food and gas, the so-called core index rose one-tenth of a percent. Economists monitor core prices to get a sense of broader inflation trends.
In the past 12 months, core prices rose one-point-two percent, up from the six-tenths of percent pace recorded last October. Still, the March increase is well below the 10-year average of one-point-nine percent.
As gas prices surge, fuel purchases ease
The average price of gasoline is now above $4 per gallon in five states, including Illinois, and it could rise to that level in New York and Washington, D.C., this weekend. The $4 mark is a tough reminder for American drivers. The last time they saw prices that high was in the summer of 2008, just before the economy went into a tailspin.
Retail surveys show that motorists are already starting to buy less fuel, yet the government still expects pump prices to keep climbing this summer. The national average has increased for 24 straight days, hitting $3.82 per gallon on Friday. It's above $4 in Connecticut, Illinois, California, Hawaii and Alaska.
Factory production on the rise
Meanwhile, in other economic news released Friday, U.S. factories produced more consumer goods, business equipment and raw materials in March, boosting manufacturing activity for the ninth straight month.
The Federal Reserve says output at the nation's factories, mines and utilities increased eight-tenths of a percent last month after edging up one-tenth of percent in February. The previous month's results were dragged down by a weather-related drop in utility production.
Factory production, the largest single segment of industrial production, increased seven-tenths of a percent last month. Manufacturing has been a key driver of economic growth since the recession ended. That continued last month, even with supply chain disruptions stemming from the crisis in Japan.
Overall industrial production has risen about 11 percent since its recession-low in June 2009. It is still eight percent below its pre-recession peak, reached in September 2007.