Energy and Food Prices Push Inflation Up
The Labor Department reported that consumer prices grew
0.3% in March, as higher costs for energy, food and airline
tickets offset a sharp drop in clothing prices. Core
inflation, which excludes food and energy, posted a 0.2%
gain. Over the past 12 months, inflation has shot up 4%,
reflecting huge gains in energy costs, which are up 17% over
that period, and food prices, which are up 4.4%. Continued
price increases in basic items such as gasoline and food
have left Americans feeling squeezed and have forced them to
curtail discretionary spending, which has been reflected in
weak retail sales of late.
Separately, with the cost of energy and food rapidly
increasing, wholesale inflation shot up 1.1% in March, the
Labor Department reported. It was the second largest
increase in the past 33 years, exceeded only by a 2.6% jump
last November. However, core inflation, which excludes
energy and food, rose a more modest 0.2%, down from a 0.5%
increase in February. Energy prices jumped 2.9% in March,
the biggest increase since November. The price of gasoline
was up 1.3%, while natural gas rose 4.2%. Home heating oil
soared 13.1% and diesel fuel increased a whopping 15.3%.
Food costs grew 1.2%.
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