CPI: Consumer prices rose 0.4% in March, 3.5% annually

April 10 (UPI) -- Inflation was on the rise in March, with consumer prices increasing by more than expected, according to a report by the Bureau of Labor Statistics Wednesday.

The Consumer Price Index rose 0.4% from the previous month and the all-items index was up 3.5% over the last 12 months before seasonal adjustment.

Core CPI, which excludes volatile food and energy prices rose 3.8% from March 2023.

Food prices were up 0.1% while energy prices rose 1.1% in March.

Prices also rose in March for shelter and gasoline. Together they accounted for over half of the monthly increase in the index for all items.

Economists had anticipated a monthly increase of 0.3% and an annual rise of 3.4% for the all items index.

In February CPI rose at 3.2% on a year-to-year basis and 0.4% from the previous month.

Markets are anticipating inflation to drop low enough that the Fed can begin cutting interest rates. But the expectations of economists before Wednesday's report was released was that there wouldn't be enough progress in lowering inflation to trigger those cuts.

"We're not headed there fast enough or convincing enough, and I think that's what this report is going to show," Dan North, senior economist at Allianz Trade North America, told CNBC ahead of the CPI report.