MercoPress. South Atlantic News Agency

US consumer prices rise 0,6% in March

United States consumer prices (CPI) increased more sharply than expected in March, 0,6%, with higher oil and gas prices adding to growing concerns about underlining inflation.

The core index which excludes volatile food and energy costs increased 0,4% in March, against expectations of 0,2% and the highest since August 2002.

The jump increases the likelihood of further interest rates hikes by the Federal Reserve.

Labour Department consumer prices index for March was the highest since last October. Over the first three months of 2005 as a whole inflation has risen at an annual rate of 4,3%, a full point ahead of the 3,3% of 2004.

On Tuesday the US Labour Department said that producer prices in March rose 0,1%, that is excluding food and energy, and in the twelve months to March, 4,9%, which is described as a sharp climb.

During March gasoline prices rose 7,9%; overall energy costs 4%; food 0,2% and clothing 0,8%, while airlines tickets jumped 2,7% the highest in four years.

According to the Federal Reserve March minutes when interest rates were increased by 0,25 to 2,75%, the seventh time running since last June, the discussions were dominated by inflation risks and how to signal concern.

The Federal Reserve Open Market Committee which decides on US monetary policy is scheduled to meet again next May 3.