U.S. consumer prices rose in March, but inflation pressures remained generally benign, which should give the Federal Reserve ample scope to keep interest rates low.
The Labor Department said on Tuesday its Consumer Price Index increased 0.2 percent last month as a rise in food and shelter costs offset a decline in gasoline prices. The CPI index had gained 0.1 percent in February.
Economists polled by Reuters had expected a 0.1 percent rise last month. In the 12 months through March, consumer prices increased 1.5 percent after rising 1.1 percent over the 12 months through February.
The so-called core CPI, which strips out the volatile energy and food components, also rose 0.2 percent in March after edging up 0.1 percent the prior month.
In the 12 months through March, the core CPI advanced 1.7 percent after rising 1.6 percent in February.
The Fed targets 2 percent inflation and it tracks an index that is running even lower than the CPI. The rise last month could ease concerns among some policymakers about inflation being too low.
In March, food prices increased 0.4 percent after rising by the same margin in February. A drought in the West has pushed up prices for meat, dairy, fruit and vegetables.
More price increases could be on the way after food prices at the factory gate posted their biggest gain in 10 months in March. Gasoline prices fell 1.7 percent, declining for a third straight month.
Within the core CPI, shelter costs increased 0.3 percent, which accounted for almost two-thirds of the rise in the index. Rents increased 0.3 percent.
There were also increases in medical care, apparel, used cars and trucks, airline fares and tobacco. The cost of recreation, and household furnishings fell.
A gauge of manufacturing in New York state grew at a slower rate than the previous month and below expectations in April after a slight decline in new orders and a drop in inventories, the New York Federal Reserve said in a separate report.
The New York Fed's "Empire State'' general business conditions index fell to 1.29 this month, the lowest since November, from 5.61 in March. Economists polled by Reuters had expected a reading of 8.0. Readings above zero indicate growth.
New orders fell to -2.77 from 3.13, the lowest since November, while inventories slid to -3.06 from 7.06. Employment gauges were mixed. The index for the number of employees rose to 8.16 from 5.88 while the average employee workweek index fell to 2.04 from 4.71.
The index of business conditions six months ahead rose to 38.23 in April from 33.21 in March. The survey of manufacturing plants in New York state is one of the earliest monthly guideposts to U.S. factory conditions.