US inflation outpaces earnings, threatens spending

April 13, 2012 17:56

WASHINGTON - US consumer prices rose modestly in March amid signs a spike in gasoline costs was ebbing, but inflation still outpaced workers' earnings and threatened to undermine consumer spending.

The Labor Department said on Friday consumer prices increased 0.3 percent last month, a smaller increase than a month earlier and in line with economists' expectations.Gasoline prices rose 1.7%, a sharp slowdown from February when costs at the pump rose more than three times as quickly.

Still, workers' earnings fell 0.4% last month after adjusting for higher prices. A separate report showed consumer sentiment slipped in April as higher gasoline prices hit household budgets.

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