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U.S. consumer prices likely rose last month because of more expensive food and gas. But overall inflation is expected to stay mild.
Economists expect that the consumer price index increased 0.3 percent in March, slightly less than February's 0.4 percent gain. Excluding energy and food costs, the so-called "core" index is expected to have risen 0.2 percent, up from the previous month's 0.1 percent increase.
The Labor Department will issue its report at 8:30 a.m. Eastern time Friday.
Inflation has eased since last year and is expected to stay mild. Food prices are moderating after sharp increases last year. Gas prices are high but are starting to level off. A gas averaged $3.91 per gallon nationwide on Thursday, three cents less than a week earlier.
And even though hiring has picked up, wages have barely kept pace with inflation. So many retailers can't charge more without losing some business.
Lower price growth leaves consumers with more money, which can be used to boost economic growth. Mild inflation also gives the Federal Reserve more leeway to stick with its plan to hold interest rates near record lows at least until late 2014.
In 12 months that ended in February, prices rose 2.9 percent. That's a full point lower than the 12-month increase in September. Core prices have risen 2.2 percent in that same period.
A small amount of inflation can be good for the economy. It encourages businesses and consumers to spend and invest money sooner rather than later, before inflation erodes its value.
Fed chairman Ben Bernanke has acknowledged that rising gas prices have boosted inflation. But he has maintained that the increases are likely temporary.
Most economists expect the Fed won't announce any new policy initiatives at its April 24-25 meeting. Policymakers appear less inclined to take further steps to boost growth. Minutes from their March 13 meeting showed only a couple members expressed support for purchasing more bonds as a way to drive down long-term interest rates and promote more borrowing and spending.
A report Thursday indicated that inflation pressures aren't increasing much at the wholesale level. The producer price index, which measures price changes before they reach the consumer, was unchanged in March. Rising costs for food and pickup trucks were offset by a drop in wholesale gas prices.
In the past 12 months, wholesale prices rose 2.8 percent, the smallest year-over-year rise since June 2010. Excluding food and gas, core wholesale prices rose 0.3 percent and 2.9 percent in the past year.