US consumer prices rose 0.6% in March as energy costs shot higher, official figures showed today, while other data showed US house construction was sharply down on the year.
The Labor Department's consumer price index (CPI) was below market expectations for a 0.7% increase in March.
Also, the 'core' inflation rate that excludes volatile food and energy costs showed a modest 0.1% rise against expectations for a 0.2% increase.
Over the past year, consumer prices are up 2.8% overall and 2.5% for the core inflation rate.
The rise in March was led by a 5.8% surge in energy costs, the largest since September 2005. Energy costs rose 22.9% in the first three months of the year.
Separate figures showed that the US recorded a 0.8% growth in construction of new houses, which was sharply down from a year ago.
The Commerce Department's figures beat analysts' predictions, but the rise was well below the previous month's increase.
The Commerce Department said housing starts set an annual pace of 1.518 million units in March compared with a 1.506 million unit pace in February.
Economists had forecast March housing starts to drop to a 1.495 million unit pace from February's originally reported 1.525 million units.
Building permits, which signal future construction plans, also rose 0.8% to a 1.544 million unit pace.
Housing completions were off 25.9% in March from a year ago at a 1.632 million unit pace - the biggest percentage decline since June 1982.
Separate Federal Reserve data showed that US industrial production unexpectedly fell 0.2% in March as utility output retreated sharply. Analysts had expected a modest gain of 0.1%.
