Consumer Prices Barely Rise in March

Consumer Prices Barely Rise in March
Sue Ogrocki/AP
By JOSH BOAK

WASHINGTON -- Lower U.S. gasoline prices kept consumer inflation in check last month, helping offset higher costs for food and clothing.

The Labor Department said Tuesday that the consumer price index rose 0.2 percent in March, after scant 0.1 percent increases the previous two months. Prices have risen just 1.5 percent year over year. That remains well below the Federal Reserve's 2 percent target for inflation.

Excluding the volatile food and energy categories, core prices increased 0.2 percent in March and 1.7 percent in the past year.

Prices at the gas pump tumbled 1.7 percent in March, lowering costs for the entire energy category.

But food prices jumped 0.4 percent, led by increases in eggs, milk, butter, oranges, pork chops, ground beef and poultry. Prices for clothing, used cars and cable television also rose.

Overall, signs point to continued low inflation. Sluggish growth and a tough job market have limited price increases, making it harder for retailers and other businesses to charge more.

Consumer prices rose just 1.5 percent for all of 2013, down from 1.8 percent in 2012.

Though shoppers welcome lower prices, super-low inflation can stall economic growth. Lower prices encourage consumers to delay purchases. Extremely low inflation can also raise inflation-adjusted interest rates, thereby discouraging borrowing.

Still, low inflation has enabled the Fed to pursue extraordinary stimulus programs to try to boost economic growth.

The Fed is now trying to unwind some of that stimulus. It plans to buy $55 billion in bonds this month, down from $85 billion in March of last year. The bond purchases are intended to lower long-term rates, which can spur borrowing and spending.

Despite scaling back its purchases, Fed officials have expressed concern about inflation running below their target. As a result, the Fed is prepared to hold shorter-term rates near zero even if unemployment falls by roughly a percentage point from its current level of 6.7 percent. This suggests that the Fed might not raise rates until the middle of 2015.


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renatt

The Associated Press believes the lies the labor department tells them! I work in supermarkets and have seen prices sky rocket in the past five years! Maybe the government forgets to account for all the products that have shrunk in size 20 to 50% over the last five years while the prices have remained the same or gone up! The day of reckoning is coming soon - everyone is broke or getting there fast!

April 15 2014 at 12:19 PM Report abuse rate up rate down Reply
Valerie

"Harder for retailers and other business to raise prices"??????

WHEN was the last time these clueless clowns visited a grocery store?? Prices increase every week.

But I guess we dumb consumers could give up a couple of our more frivolous spending habits --- like eating food every day and living indoors.

April 15 2014 at 11:24 AM Report abuse +1 rate up rate down Reply
1 reply to Valerie's comment
drpmindmender

You've missed the more obvious, frivolous spending habits like...

!. Buying and living in McMansions
2.Always buying the latest and greatest in smart phones, tablets, computers, flat-screen tvs, etc... as well as the accompaning costs for cable, wifi, movie services, phone service plans, etc...
3. Eating out regularily, instead of staying home and cooking cheaper and more nutritious meals.
4. Regularily buying or leasing new cars that are larger than needed, and or not as economical on ALL costs as possible.
5. Not using credit cards wisely by not paying off the entire balance each month.

The above fiver examples barely scratch the surface of how dumb consumers REALLY are, because they waste money on WANTS instead of NEEDS.

April 15 2014 at 12:24 PM Report abuse rate up rate down Reply
1 reply to drpmindmender's comment
Big John

How do any of these poor spending habits have to do with inflation? Prices on everything is going up irregardless of your spending habits. By the way, none of these fit my lifestyle but why should you have to live like a hermit to survive in the richest country in the world???

April 17 2014 at 11:49 AM Report abuse +1 rate up rate down
unitedpaintings

What a load of crappola.

April 15 2014 at 9:26 AM Report abuse +1 rate up rate down Reply