Are they begining to figure out yet that higher oil prices are inflationary !
Consumer Prices Climb 0.4 Percent in March on Higher-Priced Gas, Clothes and Hotels
Wednesday April 19
WASHINGTON (AP) -- Consumer prices shot up by a bigger-than-expected amount in March, reflecting higher costs for gasoline, clothing and hotel rooms. The Labor Department reported that its closely watched Consumer Price Index rose by 0.4 percent, far higher than the modest 0.1 percent gain in February. The inflation surge was led by higher gasoline prices, which jumped by 3.6%. .
With oil prices climbing to record levels above $70 per barrel this week, analysts said motorists should be braced for more pain at the pump in coming months. Core inflation, which excludes food and energy, posted a 0.3 percent rise in March. It was the biggest gain in core inflation in a year and could be a worrisome signal that higher energy prices are starting to spill over into more widespread inflation pressures. Through the first three months of this year, overall inflation has been rising at a 4.3 percent annual rate, far above the 3.4 percent price increase for all of 2005. The price acceleration reflected rising energy prices, which are up 21.8 percent at an annual rate through March, compared to a 17.1 percent rise for all of 2005.
Economists are worried that the relentless rise in energy prices could start to spread, resulting in inflationary pressures the broad spectrum of the economy. Core inflation, excluding energy and food, was up at an annual rate of 2.8 percent in the first three months of this year, slightly higher than the 2.2 percent increase for all of 2005. However, the 0.3 percent rise in core inflation in March was the biggest one-month gain since a similar 0.3 percent increase in March 2005.
The stock market soared on Tuesday after the Federal Reserve indicated in minutes of its March 28 meeting that its long string of interest rate increases to keep inflation under control could be drawing to a close. But Fed officials have said that future moves will be heavily dependent on economic data, and economists are worried that inflation might be surging. The 0.4 percent overall price increase for March was the largest since a 0.7 percent gain in January. It reflected a 1.3 percent jump in energy prices following a 1.2 percent energy price decline in February.
The energy increase was led by a 3.6 percent increase in gasoline prices. Electricity costs were up 0.5 percent but natural gas prices, which had soared on worries about adequate supplies during the winter, dropped by 4.3 percent in March and home heating oil costs were down 0.3 percent. Both declines were helped by the milder winter. Food costs edged up a tiny 0.1 percent in March, reflecting big declines in the price of fresh fruits and vegetables.
Excluding food and energy, the 0.3 percent rise in core inflation reflected a big 1 percent rise in clothing costs, the biggest one-month jump in seven years. Lodging costs were also up, with rental prices rising by 0.4 percent and hotel rates increasing by 0.8 percent. The price of new cars edged down by 0.1 percent last month but airline ticket prices jumped by 1.1 percent as the industry continued trying to recoup higher fuel costs by rising ticket prices.
