US CPI Rise Lower than Expected in March

U.S. consumer prices rose less than expected in March and underlying inflation slowed, suggesting the Federal Reserve will remain cautious about raising interest rates this year.

Other data on Thursday showed the number of Americans filing for unemployment benefits fell last week, revisiting a level last seen in 1973, showing sustained strength in the labor market.

The Labor Department said its Consumer Price Index gained 0.1 percent last month as a rebound in gasoline prices was partly offset by a drop in the cost of food. There were also slow-downs in medical care and housing costs.

The CPI fell 0.2 percent in February. In the 12 months through March, the CPI increased 0.9 percent after advancing 1.0 percent in February. Economists had forecast the CPI gaining 0.2 percent last month and rising 1.1 percent from a year ago.

The so-called core CPI, which strips out food and energy costs, inched up 0.1 percent. That was smallest increase since August and followed a 0.3 percent increase in February. In the 12 months through March, the core CPI rose 2.2 percent after gaining 2.3 percent in February.

The Fed has a 2 percent inflation target and tracks an inflation measure which is running below the core CPI.

via Reuters

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