A gas pump display shows gasoline prices in New York.
A gas pump display shows gasoline prices in New York. - 
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STEVE CHIOTAKIS: Word today from the government that consumer prices rose half a percent in March. But the nation's so-called core inflation level -- which doesn't include energy and food prices -- only nudged up very slightly.

Jill Schlesinger is editor at large at CBS/MoneyWatch. She's with us live from New York -- as she is every Friday. Good morning Jill.


CHIOTAKIS: So inflation usually indicates the economy is growing too quickly. Why are prices rising if the economy's still isn't, as we all have heard, firing at all cylinders?

SCHLESINGER: Well, you know after the debt bubble burst, and the Great Recession began we entered a period of really low prices. And the Fed's policies since then were actually aimed at lifting prices so that we didn't slide into a deflationary period when prices go down. Now those policies are combining with a lot of growth in emerging economies and putting pressure on prices. But more so on that headline number -- that top number which does exclude energy and food then the core number that strips them out.

CHIOTAKIS: Let's talk about that and how the government takes out energy and food to determine the so-called core inflation. But I still have to buy gas, and I still have to buy bread and milk at the grocery store. Why does the government take that stuff out.

SCHLESINGER: Well the government knows that we still have to pay for those things, but Fed Chairman Ben Bernanke has said that core inflation is a better predictor of where overall inflation is headed. Because food and energy are really volatile, and they can distort the inflationary landscape. So the Fed relies on this core number to help it form its policy. And right now the Fed's unofficial target for core CPI is 2 percent through the 12-months ended in March, the core has increased only 1.2 percent. So Fed governors are likely to maintain their current policy.

CHIOTAKIS: CPI -- all right, consumer price index. We thank you Jill Schlesinger from CBS/Moneywatch.