Quote of note:

The stronger economy itself gives many companies more power to raise prices, said Robert DiClemente, chief U.S. economist at Citigroup.

Rising Consumer Prices Outpace Gains in Wages
By Nell Henderson
Washington Post Staff Writer
Thursday, April 21, 2005; Page E01

Consumer prices rose in March at the fastest rate since October, outpacing gains in most workers' wages, as households paid more for energy, clothing, hotel rooms, medical care and other items, the Labor Department reported yesterday.

The department's consumer price index, the most widely followed inflation gauge, jumped 0.6 percent last month, largely reflecting the 4 percent surge in energy costs.

Some economists were more troubled by the rise in prices after stripping out volatile food and energy costs. The so-called core CPI climbed 0.4 percent in March, the biggest increase in more than two years.

The increase in the core CPI was "worrisome," said Joseph Liro, an economist with Stone & McCarthy Research Associates. Its sustained rise "provides evidence that the spike in energy prices is beginning to pass through to other consumer prices."

Other economists cautioned against seeing the pickup in overall prices as primarily driven by energy costs. The stronger economy itself gives many companies more power to raise prices, said Robert DiClemente, chief U.S. economist at Citigroup.