Government's consumer inflation measure reflects higher prices for energy.
April 14, 2004: 8:47 AM EDT
NEW YORK (CNN/Money) - The prices consumers paid for goods rose for the fourth straight month, as a government report Wednesday showed a greater rate of inflation than Wall Street expected.
The consumer price index, the broad measure of prices, rose 0.5 percent in March compared with February prices. Analysts surveyed by Briefing.com forecast a 0.3 percent rise, the same rise posted in February.
The so-called "core CPI," which excludes often volatile food and energy prices, rose 0.4 percent in the month. Briefing's forecast was for a 0.2 percent gain, which would have marched the rise in the previous month.
Energy, led by gas prices, rose 1.9 percent in March, the sharpest increase of any sector measured by the Bureau of Labor Statistics. But the overall increase was broad based, with no sector showing a decline. Other leaders included transportation prices, up 1.1 percent, and apparel prices, up 0.9 percent.
The report is sure to raise new concerns on Wall Street Wednesday about a possible rise in interest rates. The Federal Reserve has kept interest rates low for the last year, even amid signs of strong growth in the U.S. economy, due to a combination of weak employment outlook and no signs of inflation.
But with much stronger than expected employment data for March reported earlier this month, coupled with the latest inflation report, there will be new pressure and expectation of an interest rate hike sooner than later.
The price of the 10-year bond was down following the report, indicating expectating of higher rates. U.S. stock futures also traded lower following the inflation report.
The CPI increase, coupled with a 0.5 percent increase in January and the 0.3 percent February rise, gave the first quarter a compounded annual rate of inflation of 5.1 percent, with the core CPI coming in with an compounded annual rate of 2.9 percent.
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