WASHINGTON – The Labor Department says U.S. consumer prices rose a modest 0.1 percent in March as a drop in grocery prices offset higher energy costs.
Excluding volatile food and energy prices, core consumer inflation also increased 0.1 percent, the smallest gain since August.
Over the past year, overall consumer prices are up 0.9 percent and core inflation 2.2 percent
Grocery prices fell 0.5 percent in March, with cereal prices down 1.1 percent, the steepest slide since February 2006.
Energy prices climbed 0.9 percent, the most since May. Gasoline prices surged 2.2 percent.
The Federal Reserve wants to steer inflation to a 2 percent annual rate. Given economic weakness in the U.S. and abroad, it has been reluctant thus far to follow a December interest rate increase with another move higher.