In the past 12 months, the index has increased 2.7 percent, the largest increase since December 2009. Excluding the volatile food and gas categories, the core index increased 0.1 percent and is up only 1.2 percent in the past year.
Gasoline prices were up 5.6 percent last month and have jumped 28 percent in the past year. Consumers are paying more than $3.80 for a gallon of regular gasoline, according to AAA.
Food prices rose 0.8 percent last month, the largest increase in almost three years, with prices increasing on produce, dairy products, chicken and beef.
Federal Reserve Chairman Ben Bernanke has said he expects that rising prices for food and fuel are only temporary and he doesn’t expect inflation to be an issue outside of those segments in the long term.
Several transportation indexes posted significant increases, including new vehicles, used cars and trucks and airline fares, the consumer price report found. In contrast, the indexes for apparel and for household furnishings and operations both declined in March and saw solid increases in sales.
Retail sales data released earlier this week showed a 0.4 percent increase and that consumers are spending more despite pressure from increases in food and gas prices. Consumer spending makes up 70 percent of economic activity.
Confidence also showed improvement in a Bloomberg Consumer Comfort Index released Thursday, rising to minus 43 in the week to April 10, the third consecutive increase.
The Michigan survey’s index of current conditions, which reflects Americans’ perceptions of their financial situation and whether it is a good time to buy big-ticket items like cars, increased to 82.7 from 82.5 the prior month.
Consumer expectations for six months from now, which projects the future of consumer spending, improved to 61.2 from 57.9.
Consumers in today’s confidence report said they expect an inflation rate of 4.6 percent over the next 12 months, the same as in the March survey and the highest since August 2008.
In another report Friday, the Federal Reserve said industrial production increased 0.8 percent, which was more than estimated and the ninth straight monthly increase with factories producing more consumer goods, business equipment and raw materials in March.
Manufacturing has been driving the nation’s economic recovery and in March, factory production, the largest single segment of industrial production, increased 0.7 percent last month.