WASHINGTON, April 10 — US consumer prices increased by the most in more than a year in March, but underlying inflation remained benign against the backdrop of slowing domestic and global economic growth.

The Labour Department said today its Consumer Price Index rose 0.4 per cent, boosted by increases in the costs of food, gasoline and rents. That was the biggest advance since January 2018 and followed a 0.2 per cent gain in February.

In the 12 months through March, the CPI increased 1.9 per cent. The CPI gained 1.5 per cent in February, which was the smallest rise since September 2016. Economists polled by Reuters had forecast the CPI climbing 0.3 per cent in March and accelerating 1.8 per cent year-on-year.

Inflation has remained muted, with wage growth increasing moderately despite tightening labour market conditions. The tame inflation environment, together with slowing economic activity, support the Federal Reserve’s decision last month to suspend its three-year campaign to raise interest rates.

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The US central bank dropped projections for any rate hikes this year after increasing borrowing costs four times in 2018.

Excluding the volatile food and energy components, the CPI nudged up 0.1 per cent, matching February’s gain.

In the 12 months through March, the core CPI increased 2.0 per cent, the smallest increase since February 2018. The core CPI rose 2.1 per cent year-on-year in February.

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The Fed, which has a two per cent inflation target, tracks a different measure, the core personal consumption expenditures (PCE) price index, for monetary policy.

The core PCE price index increased 1.8 per cent on a year-on-year basis in January after a rising 2.0 per cent in December. It hit the Fed’s two per cent inflation target in March last year for the first time since April 2012.

The February and March PCE price data will be released on April 29. The February data was delayed by a 35-day partial shutdown of the federal government that ended on Jan. 25.

Energy prices jumped 3.5 per cent in March, accounting for about 60 per cent of the increase in the CPI last month, after gaining 0.4 per cent in February. Gasoline prices surged 6.5 per cent after rising 1.5 per cent in February.

Food prices gained 0.3 per cent after accelerating 0.4 per cent in February. Food consumed at home increased 0.4 per cent. Consumers also paid more for rent. Owners’ equivalent rent of primary residence, which is what a homeowner would pay to rent or receive from renting a home, increased 0.3 per cent in March after a similar gain in February.

Healthcare costs rebounded 0.3 per cent after slipping 0.2 per cent in February. Apparel prices fell 1.9 per cent, the biggest drop since January 1949, after two straight monthly gains. There were decreases in the price of used motor vehicles and trucks, airline fares and motor vehicle insurance.

The cost of new vehicles, however, rebounded 0.4 per cent after declining 0.2 per cent in February. — Reuters