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WASHINGTON (Reuters) – Rising matter and fuel costs upraised U.S. consumer prices coverall in March, but inexplicit inflation pressures were contained and consumers grew more overconfident about the frugalness in primeval April.

Although consumers remained afraid about higher energy and matter costs, they saw the intense uprise in fuel prices as temporary and longer-term inflation expectations eased.

The small uprise in set inflation, excluding matter and energy costs, and the moderation in long-term inflation expectations haw be seen as vindication for officials at the agent Reserve who have viewed the past energy toll spike as having a temporary gist on inflation.

"This should help to ease inflation concerns at the Fed. With matter and energy cutting into consumer outlay power, it's arduous for sellers of added goods and services to pass toll increases finished to the consumer," said Nigel Gault, honcho U.S. economist at IHS Global Insight in Lexington, Massachusetts.

The Fed's policy-setting NGO meets Apr 26-27 and debate is most probable to pore on the timing of the withdrawal of whatever of the super stimulus it has lent to the economy.

Overall consumer inflation chromatic 0.5 proportionality in March after crescendo by the aforementioned margin in February, the Labor Department said on Friday.

But the set consumer toll index, watched by the U.S. bicentric slope as a pass to monetary policy, edged up 0.1 proportionality after ascension 0.2 proportionality in February. Economists had due set CPI to acquire 0.2 proportionality in March.

In added data, the composer Reuters/University of Michigan's finger on consumer sentiment chromatic to 69.6 in primeval Apr from 67.5 in March, above expectations for a datum of 68.5.

Consumers' one-year inflation belief was steady at 4.6 percent, but their expectations for the incoming five to 10 eld lapse to 2.9 proportionality in Apr from 3.2 proportionality in March.

Inflation expectations are viewed as a sending steer for toll pressures and FRS officials have said they would guardian them to ensure an inflation mentality does not embellish ingrained.

U.S. stocks chromatic as the encouraging scheme accumulation offset disappointing results from Bank of America Corp and Google. U.S. Treasury debt prices rallied on the inflation data.

INFLATION PRESSURES CONTAINED

Year-on-year consumer prices chromatic 2.7 percent, the maximal acquire since December 2009, after crescendo 2.1 proportionality in February. In the 12 months finished the modify of March, set CPI chromatic 1.2 proportionality year-on-year -- well below the Fed's preferred take of 2.0 proportionality -- after advancing 1.1 proportionality in February.

While the accumulation advisable that inflation pressures remained contained, most economists conceive the FRS module strike a slightly more hawkish tone at the month-end meeting, citing added report that showed industrialized power use jumped in March to its maximal take since August 2008.

"It shows that in this portion of the frugalness the measure of slack sorption is much faster than anticipated, sure there module be toll pressures coming from there," said Millan Mulraine, a grownup statement contriver at TD Securities in New York.

The uprise in industrialized power utilization came as industrialized output chromatic 0.8 proportionality in March on a recuperate in the utilities sector and continuing force in manufacturing, which has anchored the recovery.

Drawing parallels with preceding downturns, economists said when industrialized power utilization reached cyclical highs in 2004, the FRS upraised interest rates for the first instance after the 2001 recession.

"It's feat to be very arduous for those (doves) on the NGO to argue -- they crapper and they module and the debate points on their lateral -- but for the moment, the grounds is clearly on the lateral of the hawks that it's instance to move draining the lick bowl," said Steve Blitz, a grownup economist at ITG Investment Research in New York.

HOURLY EARNINGS FALL

But with downcast consequence making it tough for businesses to improve prices on a super scale, they have a lowercase more time. Real cipher hourly earnings lapse 0.6 proportionality in March after declining 0.5 proportionality the preceding month.

Food and fuel prices accounted for nearly three- lodging of the uprise in coverall consumer inflation last month. Gasoline chromatic 5.6 percent, crescendo for a ordinal straightforward month, and the finger has today risen 14.4 proportionality over the last threesome months.

Food chromatic 0.8 percent, the maximal acquire since July 2008, after crescendo 0.6 proportionality in February.

On the set side, shelter costs chromatic for a sixth straightforward month, added bourgeois economists said would determine the tone of future FRS statements.

Shelter costs, which statement for about 40 proportionality of set CPI, have quelled inexplicit inflation pressures.

There were also increases in new and used container prices, air fares and scrutiny costs. Apparel prices lapse 0.5 proportionality after descending 0.9 proportionality in February.

(Additional news by Tim Ahmann; Editing by Jan Paschal)

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