By Anna Roberts

The Consumer Price Index, published monthly by the Labor Department, is released tomorrow at 8:30 a.m. Economists predict a solid uptick in the headline rate, as well as core inflation—the headline figure without the addition of fickle food and energy prices. A positive rate this March would be the first all items increase month to month since October.

Consumer prices declined by 0.2 percent in February after flattening out at zero in January and December. The dip last month was caused by a sharp loss in oil prices, which economists say are temporary. However, core prices have risen 2.3 percent over the past year, marking the largest gains since May 2012.

“We have had deflationary numbers for three months,” said Mikhail Melnik Ph.D., associate professor of economics at Kennesaw State University in Georgia. “This is going to be completely reversed and fully corrected for in March, purely because of energy volatility.”

Since the Federal Reserve first raised interest rates in December, economists have kept a close eye on Chair Janet Yellen, waiting to see if she’ll finally pull the trigger on higher rates. Whatever the index shows tomorrow, not many expect the Fed to raise rates just yet.

Building inflationary pressure will help bolster confidence that the economy is continuing to recover and grow assertively.

Here’s what economists are looking for in tomorrow’s report.

One-Month Percent Change Consumer Price Index Headline vs. Core

One-Month Percent Change Consumer Price Index Headline vs. Core

1. Core over headline rate:

 The Consumer Price Index surveys prices from a representative basket of American goods and services, ranging from perfume to college textbooks. The headline rate, month to month, includes 80,000 items, plus volatile food and energy prices.

Essentially, it’s a wide-ranging survey. Economists say that the most accurate evaluation of the numbers is determined when the least stable prices are removed. Last month the drop in oil prices skewed the headline rate down, while the core rate actually rose 0.3 percent for the second month in a row. Firm and potentially rising core prices are a good sign.

 “I think the core index will show stability,” Melnik said. “You don’t want to see the core prices moving sharply, especially on the lower end.”

2. Rising oil prices

 In February the gas index dropped 13 percent from January. Economists believe the nosedive was a one-time thing and that energy prices should spring back in March. Right now, oil prices are up, hovering around $40 per barrel.

 “Energy is going to rise and create a bounce, a positive contribution to inflation,” said Robert Brusca, president of Fact and Opinion Economics in New York City.

 Brusca will be paying attention to whether or not energy prices continue to distort the headline rate, but this month, he says he expects positive outcomes.

3. Escalating Inflation Pressure

 If the core rate rises, as economists are predicting, this will mark the third consecutive month of increasing core prices. That’s a good sign that the economy is getting stronger.

 Chair Yellen has taken a slow approach to raising interest rates, continuing to tighten monetary policy. Consistent rising inflationary pressure should help give The Fed the evidence they need to raise rates at least once more this year. Although, likely not at their April 26-27 meeting.

4. Primary Components

 Since the consumer price index is composed of such a large volume of goods and services, it’s important to look at which components are showing movement. Higher prices means higher market demand. The prices of durable goods, like vehicles, or household furniture are good indicators of consumer income.

 “We’re starting to see growth in wages which translates into products consumers buy,” Mikhail Melnik said. “If I buy a $30,000 car, you an rest assured that I’m confident in my income for the next 30 days.

5. Goods or Services

 The U.S. economy is primarily made up of services. The service sector dominates the consumer price index, accounting for about 70 percent of the report. Many economists have begun asking if the economy can be sustained on services alone. The problem is that services do not account for a significant amount of productivity, Robert Brusca said.

 “There’s a clear goods versus services framework,” Brusca said. “We have goods that trade on a world market and show a lot less pressure than services that are insulated from international competition.”

Index components that demonstrate service sector strength like medical care and airline prices indicate a further reliance on services to drive the economy.