WASHINGTON (FNS) -- Consumer prices for food and beverages rose 0.1% in March, a bright spot in an otherwise worrisome report that raised fears that inflation is about to re-ignite.
The Labor Department's release of data showing that retail prices rose 0.7% last month spooked Wall Street and led to April 15's "bloody Friday" that saw the stock markets shed $1 trillion in value, its biggest single-day dollar loss ever, analysts said.
By last week, though, the markets generally rebounded and analysts said the March Consumer Price Index report may not forebode spiraling inflation, since energy and transportation costs appear to be declining.
Energy prices soared 4.9% in March, after a 4.6% rise a month earlier due to an ongoing cutback in production by oil exporting nations. Under pressure from the United States, most of these nations agreed in late March to boost oil output substantially and analysts expect gasoline and diesel fuel prices to decline this month and possibly through summer.
Transportation costs also were up 2.5% in March due to higher fuel costs, which also pushed up the overall CPI higher than analysts had expected.
The mid-month report indicated that retail food price inflation is not being appreciably affected by fuel price gyrations, as it has remained at a low and steady rate over the past year -- from a low of -0.2% in March 1999 to 0.5 in February of this year. For the year ended March, retail food prices were up just 1.8%, compared with a 3.7% increase for all products measured by the CPI.
Analysts have attributed the relatively low food price inflation rate to competitive factors, including the growth of e-commerce and virtual supermarkets.
Retail food price increases, in fact, probably were lower than announced by the Labor Department. The actual price indexes used to formulate the CPI show retail prices rose by 0.06% in March, but this is rounded up to 0.1% to take into account possible statistical errors. By comparison, the indexes show the price for food eaten away from home increased 0.18% in March -- or three times the rate for supermarkets.
During March, two of the six major components of the food-at-home price index declined. Retail fruit and vegetable prices fell by 1.6% and dairy prices were down 1.1%.
These helped to offset increases in two other product groups that greatly influence the retail food CPI. Retail meat, poultry, fish and egg prices rose by 0.9% in March, and dairy prices increased 0.3% for the month.
Retail prices for alcoholic beverages climbed by just under 0.3% in March, while soft drink prices advanced 0.1%.
