Consumer Prices Tick Up

Soaring energy costs pushed prices at the consumer level higher in March, however, fears of inflation in the broader price level haven't materialized of yet.

The Consumer Price Index was higher by 0.5% on a month-over-month basis in March, according to the Labor Department.  Energy prices, which were pushed higher by a 5.6% spike in gasoline costs, and food prices contributed to nearly three quarters of the total monthly gain. Indeed, the 0.8% rise in food prices was the fastest pace since July 2008.

Excluding food and energy prices, so-called core-CPI was up 0.1%, less than the 0.2% economists were expecting.

Policymakers generally pay more attention to the core reading since it's more easily affected by monetary and fiscal policy moves than food and energy, which tend to sway based on exogenous factors.

Many economists have raised concerns that the high price of energy will seep into other prices, creating dangerous long-term inflation.  While those concerns largely haven't come to fruition, some analysts believe recent data foreshadow a rise down the line.

The CPI report "provides further evidence that prices across a broad range of goods and services are gradually beginning to rise," Peter Newland, an economist at Barclays Capital, wrote in a research note.

Peter Boockvar, managing director at Miller Tabak + Co., echoed Newland's sentiment.

"The question ... is not if but when the core rate starts to move higher in a more pronounced fashion," he wrote.

However, for the moment, rising food and energy prices are cutting consumers' spending ability, making it difficult for suppliers to pass higher prices off to consumers in other goods, notes Nigel Gault, chief U.S. economist for IHS Global Insight.

The price of both goods and services tracked in the CPI-data ticked higher during the month.

In the goods component, the price of new and used vehicles increased during the month, but losses in the price of apparel somewhat offset the gain.  Transportation costs and the price of shelter led the services component higher.