Consumer prices edged up a modest amount in March with prices outside of food and energy rising at the slowest pace over the past 12 months in six years.
Despite the good inflation news, household budgets remained under pressure as hourly earnings fell again.
The Labor Department said Wednesday that consumer prices edged up 0.1 percent last month. Core inflation, which excludes food and energy, was unchanged last month.
The small overall increase was in line with expectations while the flat reading for core prices was better than the 0.1 percent rise economists had expected.
Over the past 12 months, core inflation is up by just 1.1 percent, the best 12-month showing since a similar 1.1 percent rise for the 12 months ending in January 2004. That slow rise in core prices has not been lower in more than four decades.
However, household budgets remain under pressure. The Labor Department said in a separate report that average hourly earnings dipped 0.1 percent in March. After adjusting for the small rise in inflation, earnings were down 0.2 percent for the month.
Over the past year, hourly earnings, after adjusting for inflation, are down 0.6 percent as the lingering effects of the worst recession since the 1930s continue to depress wages.
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