Inflation is the new black.
Consumer prices shot up by a bigger-than-expected amount in March, reflecting higher costs for gasoline, clothing and hotel rooms.
The Labor Department reported that its closely watched Consumer Price Index rose by 0.4 percent, far higher than the modest 0.1 percent gain in February. The inflation surge was led by higher gasoline prices, which jumped by 3.6 percent.
Core inflation, which excludes food and energy, posted a 0.3 percent rise in March. It was the biggest gain in core inflation in a year and could be a worrisome signal that higher energy prices are starting to spill over into more widespread inflation pressures.
Through the first three months of this year, overall inflation has been rising at a 4.3 percent annual rate, far above the 3.4 percent price increase for all of 2005. The price acceleration reflected rising energy prices, which are up 21.8 percent at an annual rate through March, compared to a 17.1 percent rise for all of 2005.
Economists are worried that the relentless rise in energy prices could start to spread, resulting in inflationary pressures the broad spectrum of the economy. Core inflation, excluding energy and food, was up at an annual rate of 2.8 percent in the first three months of this year, slightly higher than the 2.2 percent increase for all of 2005.