Rusty Thomas doesn't need a federal report to tell her that her money isn't buying as much as it used to.
But the rural McLouth resident took some solace in a report Wednesday from the Labor Department, a study showing that the country's core rate of inflation had increased in March at its fastest pace in two-and-a-half years.
Thomas' take: at least she's got company.
"I'm having to cut costs like everybody else," said Thomas, who sells insurance and investment products in Lawrence. "No matter how much I make, it's never enough."
Gasoline prices aren't the only costs pinching consumers' wallets these days, according to the department's latest Consumer Price Index. The cost of health care, clothing, hotel rooms and airline travel all jumped last month.
The index's core inflation rate -- which excludes the volatile energy and food categories -- rose by 0.4 percent last month, the biggest one-month rise since August 2002.
Underscoring that inflation pressures are mounting, the Federal Reserve said Wednesday in its latest survey of business conditions in the Fed's 12 regions that "price pressures have intensified in a number of districts and most report that high or rising energy prices are a concern across sectors."
So far this year, inflation at the consumer level is rising at an annual rate of 4.3 percent, compared with a 3.3 percent increase for all of 2004.
Excluding food and energy, core inflation is rising at an annual rate of 3.3 percent in the first three months of this year, significantly higher than the 2.5 percent increase in 2004.
The Fed gradually has raised interest rates during the past year as a hedge against inflation. Analysts said the central bank could find itself in the difficult position of choosing between fighting slower growth by cutting interest rates, or higher inflation, which would require rate increases.
The Fed's latest survey of regional conditions said that economic growth was continuing from late February through early April but that the growth ranged from "robust" to "moderate" to "uneven."
"The Fed is caught," said David Wyss, chief economist at Standard & Poor's in New York. "The Fed would like to keep interest rates low to keep the economy moving, but on the other hand they have to fight against inflation."
Wyss and other analysts said the Fed probably would continue to raise rates by one quarter of a percentage point at its upcoming meetings, though a one-half point jump could happen if energy-driven inflation worsened.
"Energy prices are the key wild card for the economy," said Mark Zandi, chief economist at Economy.com.
For March, energy costs shot up 4 percent, the biggest one-month gain since a similar rise in October. Prices for gasoline, home heating oil and natural gas all increased.
Food costs rose by 0.2 percent in March, following a gain of 0.1 percent in February.
Thomas sees the increases every time she gets to the meat counter at the grocery store. She has taken to passing on her once-a-month KC strip steaks, opting instead for ground beef -- not even the ground chuck she would prefer.
"I can drain off the fat and save myself money," she said.
Clothing costs, which had declined, jumped 0.8 percent in March, the biggest one-month gain in 12 months. Hotel room prices rose a record 3.9 percent.
Some analysts suggested that both increases were one-month aberrations that reflected the government's inability to adjust for the impact of an early Easter, which was in March this year.
Airline ticket prices rose by 2.7 percent, the largest increase in nearly four years, reflecting efforts to deal with surging fuel costs. Health care costs were up 0.5 percent in March after an even bigger 0.6 percent increase in February.