Higher Fuel, Food Costs Drive Up Consumer Prices Sharp Rise In March Matches Steepest Increase In Five Years

Consumer prices surged 0.4 percent for March, matching the steepest increase in five years, with higher costs for everything from gasoline to food to clothing.

The Clinton administration insisted the higher-than-expected increase in the consumer price index did not mean inflation was becoming a problem and financial markets seemed to agree.

The Dow Jones industrial average, which had tumbled by more than 200 points over the past week because of inflation and interest rate concerns, staged a comeback Friday, closing up more than 45 points.

The Labor Department report said the 0.4 percent increase in consumer prices matched a January rise and was the biggest one-month jump since a 0.7 percent increase in October 1990. Consumer prices had risen 0.2 percent in February.

Energy costs jumped 1.4 percent in March, the biggest advance since a 1.9 percent gain in January. It was the fourth straight gain after declining throughout most of 1995.

Food prices surged by 0.6 percent, the biggest one-month increase in this component since December 1994.

Excluding the volatile food and energy components, the so-called core rate of inflation was up 0.3 percent.

For the year so far, inflation at the consumer level has been rising at an annual rate of 4 percent, far above the 2.5 percent increase for all of 1995 - the fourth straight year that inflation has been under 3 percent.