U.S. consumer prices rose for a second straight month in March as the cost of gasoline and shelter increased, signs of some inflation that should keep the Federal Reserve on course to start raising interest rates this year.
The Labor Department said Friday its Consumer Price Index increased 0.2 percent last month after a similar gain in February. Price increases were fairly broad-based in March, suggesting the recent disinflationary trend had run its course.
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In the 12 months through March, the CPI slipped 0.1 percent after being unchanged in February.
Economists polled by Reuters had expected the CPI to rise 0.3 percent from February and unchanged from a year ago.
March's price gains are likely to bolster the Fed's long-held view that inflation will gradually move toward the U.S. central bank's 2 percent target as the dampening effect of lower energy prices fades.
"There is no real surprise in the CPI number," University of Michigan economics professor Justin Wolfers told CNBC's "Squawk Box." "You've got annual inflation now."
The Fed has kept overnight interest rates near zero since December 2008, but a number of officials have said a rate hike will likely be considered at the June policy-setting meeting.
But a recent series of weak economic data, including March nonfarm payrolls, has left many economists believing monetary policy tightening will not happen before September.
The so-called core CPI, which strips out food and energy costs, increased 0.2 percent in March after a similar rise in February. In the 12 months through March, the core CPI rose 1.8 percent, the largest increase since October.
"The core number, the one we should be looking at [is] running at 1.8. That usually runs about 40 basis points ahead the PCE, the Fed's preferred inflation number," said Wolfers, referring to the personal consumption expenditure index.
Gasoline prices rose 3.9 percent, the largest increase since February 2013, after rising 2.4 percent in February. Food prices slipped 0.2 percent last month.
Wolfers said that even if oil prices recovered slightly, they would still be much lower than they were a year ago.
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Elsewhere, shelter costs rose 0.3 percent. That, together with higher energy prices, accounted for much of the gain in the CPI last month.
Further gains in the cost of shelter are likely in the months ahead, given rising demand for rental accommodation.
There were increases in prices of new motor vehicles, used cars and trucks and medical care services. Apparel prices rose, as did prices for household furnishings and operations. Airline fares fell 1.7 percent.
—CNBC's Nana Sidibe contributed to this story.