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News > Economy
Consumer prices rise
But CPI gain is less than economists expected, as prices ex-food and energy are flat.
April 16, 2003: 8:53 AM EDT

NEW YORK (CNN/Money) - Consumer prices rose in March, the government said Wednesday, but by less than analysts expected.

The Labor Department said its consumer price index, the government's main inflation gauge, rose 0.3 percent after rising 0.6 percent in February, while the so-called core CPI, which excludes often-volatile food and energy prices, was flat after rising 0.1 percent in February.

Economists, on average, expected CPI to rise 0.4 percent and core CPI to rise 0.2 percent, according to a recent Reuters poll.

The report had little impact on U.S. stock market futures, which rose, pointing to a positive opening on Wall Street. Treasury bond prices were little changed.

More than 90 percent of the total increase in headline CPI was due to a 4.6-percent jump in energy prices, the Labor Department said, reflecting the lingering effects of a pre-war run-up in crude oil prices. Gasoline prices rose 4.1 percent, fuel oil rose 9.8 percent and natural gas prices rose 14.8 percent.

Since the war began, however, crude oil prices have fallen, and gasoline and other energy costs are likely to fall as well.

Otherwise, there was little inflation in the U.S. economy in March, continuing a long trend -- in the past 12 months, core CPI has grown a mere 1.7 percent, matching a 37-year low.

Some economists, in fact, have worried from time to time about the prospect of deflation, an unstoppable drop in prices that cripples corporate profits and leads to further economic weakness. Such a vicious cycle has afflicted Japan, the world's second-largest economy, for much of the past decade.

Most economists say it's unlikely deflation will hit the U.S. economy, but Federal Reserve policy makers have made a point in the past several months of saying they've got plans to deal with deflation if it does arise.  Top of page

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