-- The US seasonally adjusted consumer price index, a measure of inflation, rose by 0.9% in March, as expected in a survey compiled by Bloomberg as of 7:30 am ET and following a 0.3% increase in February, according to data released Friday by the Bureau of Labor Statistics.
Core CPI, which excludes food and energy prices, rose by 0.2%, smaller than the consensus estimate for a 0.3% increase and the same as in the previous month.
Energy prices were the key factor, as expected due to the conflict in Iran. Overall energy prices rose by 10.9%, the largest monthly increase since September 2005, with gasoline prices up a record 21.2%. Excluding just energy prices, CPI was up 0.2% for a second straight month as food prices were flat.
Owners' equivalent rents rose by 0.3%, while regular rents increased by 0.2%. There were also notable gains in transportation services, especially airline fares.
Providing some offset, new motor vehicle prices rose by only 0.1% and used vehicle prices fell by 0.4% for a second straight month.
CPI excluding food, energy and shelter increased by 0.1% after a 0.2% gain in the previous month.
The year-over-year rates for overall and core CPI accelerated to 3.3% and 2.6%, respectively, from 2.4% and 2.5% in the previous month.
The monthly consumer price index, or CPI, reported by the Bureau of Labor Statistics, measures the index level of prices paid by consumers for a basket of goods and services such as food, energy, vehicle, medical care, apparel, and housing.
The core measure, which excludes food and energy due to their volatility, is closely watched by markets and the Federal Reserve as a sign of underlying inflation pressures.
Rising inflation is a sign of strong US consumer demand, but both stocks and bond normally react negatively to level of price growth that would necessitate higher interest rates.