The cost of living in the U.S. rose in March for a ninth consecutive month, led by increases in food and fuel costs that have yet to filter down to other goods and services.

The consumer-price index increased 0.5 percent for a second month, in line with the median forecast of economists surveyed by Bloomberg News, figures from the Labor Department showed today in Washington. Excluding volatile food and energy, the so-called core gauge rose 0.1 percent, less than forecast and restrained by lower clothing expenses and smaller gains in medical care.

Unemployment at 8.8 percent and falling wages adjusted for inflation mean retailers and service providers will have a hard time passing price increases along to customers. Rising food and gasoline prices are limiting consumer purchases of other goods, slowing the economic recovery.

“There are fairly subdued pressures outside of food and energy,” said Sal Guatieri, a senior economist at BMO Capital Markets Inc. in Toronto, who correctly forecast the core rate. “There is still little appetite on the part of consumers to absorb cost increases and retailers are finding it difficult to pass rising input costs onto consumers, largely because consumer wages are rising very modestly.”

Wages Falling

Another report showed factories continue to propel the economic expansion. The Federal Reserve Bank of New York’s general economic index rose to 21.7 from 17.5 in March. Figures greater than zero signal factory expansion in the so-called Empire State Index, which covers New York, northern New Jersey and southern Connecticut.

Stock-index futures climb after the reports, erasing earlier losses. The contract on the Standard & Poor’s 500 Index maturing in June was at 1,310.3 at 8:35 a.m. in New York, little changed from yesterday’s close. Treasury securities climbed, sending the yield on the benchmark 10-year note down to 3.44 percent from 3.50 percent late yesterday.

Forecasts for consumer prices in the Bloomberg survey of 82 economists ranged from gains of 0.3 percent to 0.9 percent.

Economists projected the core gauge would rise 0.2 percent, according to the survey median. The 0.1 percent increase last month was the smallest since December.

12-Month Gains

Prices increased 2.7 percent in the 12 months ended March, the biggest year-to-year gain since December 2009. The core CPI rose 1.2 percent from March 2010. As recently as October, the year-over-year gain had slowed to 0.6 percent, the smallest since records began in 1958.

Rising prices have prompted economists surveyed by Bloomberg to lower their forecasts for inflation-adjusted consumer spending. Purchases increased at a 2 percent annual rate in the first quarter after a 4 percent gain in the last three months of 2010.

Average hourly earnings adjusted for inflation dropped 0.6 percent in March, the most since June 2009, after falling 0.5 percent the prior month, a separate release from the Labor Department showed today. Over the past 12 months they were down 1 percent, the biggest year-to-year drop since September 2008.

Gains in food and energy prices have reflected increased demand from fast-growing economies such as Brazil, China and India. The cost of a gallon of regular gasoline at the pump averaged $3.54 in March, up from $3.18 the prior month, according to data from AAA, the nation’s largest motoring group.

Gasoline Prices

Energy costs increased 3.5 percent from a month earlier, the most since December. Gasoline prices increased 5.6 percent.

Food costs rose 0.8 percent, the biggest increase since July 2008.

The cost of medical care increased 0.2 percent after a 0.4 percent increase the prior month. Apparel costs dropped 0.5 percent in March after a 0.9 percent decrease a month earlier.

Some companies are saying they will test the waters on price increase later this year.

“We are now seeing significant cost price inflation, which will manifest itself late in 2011, particularly in raw materials such as cotton and wool,” R. Neal Black, chief executive officer of Jos. A. Bank Clothiers Inc. said in a March 31 teleconference. “The result will be selected retail price ticket increases throughout 2011, testing the customer’s capacity to absorb small increases.”

The Federal Reserve last month reiterated a plan to complete a second round of bond purchases that’ll pump $600 billion into the financial system by June.

Global View

The Group of 24, which groups countries from Africa, Asia and Latin America, yesterday said “overly expansionary” monetary policy in advanced economies was fueling inflation in emerging economies. The group was meeting on the sidelines of a G-20 meeting in Washington.

Faced with rising gasoline prices, Ford Motor Co. (F), the second-largest U.S. carmaker, has been able to sell more fuel- efficient vehicles at higher prices.

“In the first two months of 2011, average transaction prices for Ford brand vehicles were almost 3 percent higher than the same period a year ago,” Ken Czubay, vice president for U.S. marketing and sales, said on a March 1 conference call. “History tells us that fuel economy increases in importance when gasoline prices rise.”

The CPI is the broadest of three monthly price gauges from the Labor Department, because it includes goods and services. Almost 60 percent of the CPI covers prices consumers pay for services ranging from medical visits to airline fares and movie tickets.

Import prices rose 2.7 percent last month, the most since June 2009, led by the biggest jump in food costs since 1994, the Labor Department said April 12.

Data from the Labor Department yesterday showed March producer prices climbed 0.7 percent, less than forecast.