Inflation posted its biggest year-on-year rise last month as consumers stretched to cover higher costs for food and gasoline, Reuters reported after the release of a U.S. Department of Commerce report.

Consumer spending, adjusted for inflation, edged up 0.2 percent in March after rising 0.5 percent in February, the Commerce Department said.

Nominal spending increased 0.6 percent for a ninth straight month of gains, after advancing 0.9 percent in February.

Economists had expected spending, which accounts for about 70 percent of U.S. economic activity, to rise 0.5 percent.

The government reported on Thursday that consumer spending grew at a 2.7 percent annualized rate in the first quarter after a 4 percent increase in the final three months of 2010.

That contributed to economic growth slowing to a 1.8 percent rate in the first quarter after a 3.1 percent expansion in the last quarter of 2010.

Higher food and energy prices kept inflation elevated in March, with the personal consumption expenditures price index up 0.4 percent after rising by the same margin in February. Compared with March 2010, the index was up 1.8 percent — the largest increase since May — after rising 1.6 percent in February.

Spending was supported by incomes, which increased 0.5 percent last month after a 0.4 percent gain in February. The rise in incomes was a touch above economists’ expectations of a 0.4 percent gain.

Savings edged up to $651.2 billion from $647.5 billion in February. The saving rate was unchanged at 5.5 percent.

Separately, wages rose at a 0.4 percent rate in the first quarter, a U.S. Department of Labor report showed, after increasing at the same pace in the fourth quarter.