U.S. consumer prices firmed a bit in March, as food and housing rental costs rose in a possible sign that a disinflationary trend had run its course.
The increase should allay concerns among some Federal Reserve officials that inflation was running too low, although the rise was mild enough to suggest the central bank could keep benchmark interest rates near zero for quite some time.
“The sharp upswing in housing costs could be an early signal of a more sustained push higher in inflation,” said Millan Mulraine, deputy chief economist at TD Securities in New York.
The Consumer Price Index increased 0.2 percent in March after gaining 0.1 percent in February, the Labor Department said on Tuesday. Shelter and food accounted for most of the rise, which beat economists’ expectations for a 0.1 percent advance.
While prices for many items tend to swing from month to month, housing costs generally follow a steadier path.