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Mar 15, 2008 7:44 am US/Eastern

Inflation Pauses Last Month, But Gasoline Spikes

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MIAMI (CBS4) ―

The national inflation rate was 4.0 percent, according to the new figures from the U.S. Bureau of Labor Statistics on Friday, but economists said the better than expected reading will likely be reversed in coming months, considering the big surge in energy prices in recent weeks.

Crude oil hit a record high this week above $110 per barrel and gasoline pump prices jumped to a national record of $3.267. In South Florida, gas averages $3.38 for a gallon of regular.

The region's inflation rate last month was 5.3 percent, down from 5.8 percent in December, but up from 2.9 percent a year ago. The region's inflation has been outpacing the national rate since December 2004.

Also released on Friday, the Reuters/University of Michigan preliminary index of consumer sentiment decreased to 70.5 from 70.8 in February. The measure is the lowest reading since February 1992.

Record gasoline prices and the loss of 85,000 jobs so far this year are undermining consumer sentiment, pointing to weaker spending.

The Federal Reserve, which this week announced new measures to free up credit, has signaled it will continue cutting interest rates to keep the economy from contracting.

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