The U.S. inflation rate rose by 2.7% in the 12 months up to March, new data revealed Friday, a steady decline from the pace seen towards the end of 2011.
Inflation was relatively tame last month, as the U.S. Bureau for Labour Statistics reported America's consumer price index rose 0.3% in March, below February's 0.4% rise.
After stripping out large increases in volatile food and gas prices, the so called "core" rate came in at a 0.2% monthly gain. Energy prices have gone up by 4.6%, while food prices have gained 3.3% over that period.
Prices for for shelter, medical care, apparel, recreation, new vehicles, used vehicles and airline fares increased, while the indexes for tobacco and household furnishings and operations were among the few to decline in March.
In the fall of 2011, the overall annual inflation rate peaked at 3.9 per cent. So, a 2.7% gain is an indication that inflation is under control. Policymakers generally like to see the inflation rate hover in a range between 2-3%.
Mild price increases leave consumers with more money to spend, which boosts economic growth. Lower inflation also gives the Federal Reserve more leeway to keep interest rates low.
