Consumer prices rose by the most since March

WASHINGTON (AP) — More expensive gas, food, clothes and other necessities are squeezing consumers who are already struggling with stagnant pay and worried about a weak economy.

Still, economists say they don't expect inflation to rise much further. Many forecast that it will peak sometime this year. Gas prices have declined this month and are expected to drop more.

And with the economy still weak, consumers can't afford much higher costs, limiting the ability of retailers to raise prices.

The Consumer Price Index rose 0.5 percent in July, the Labor Department said today. That followed a drop of 0.2 percent in June.

An increase in gas prices accounted for much of the swing.

The core index, which excludes volatile food and energy costs, rose 0.2 percent. That's below the 0.3 percent rise in each of the previous two months.

The Federal Reserve and private economists tend to focus on core inflation. It's seen as a better predictor of price changes than overall inflation is.