US con­sumer prices rose mod­est 0.2 per­cent

The Columbus Dispatch - - Market Summary - By Christo­pher Ru­gaber

WASH­ING­TON — Con­sumer prices in­creased at a mod­est pace in Fe­bru­ary, un­der­scor­ing that in­fla­tion pres­sures ap­pear to be muted for now.

The con­sumer price in­dex in­creased 0.2 per­cent last month, af­ter a sharp 0.5 per­cent gain in Jan­uary, the La­bor Depart­ment said Tues­day. Core prices — which ex­clude the volatile food and en­ergy cat­e­gories — also climbed 0.2 per­cent. Over­all con­sumer prices rose 2.2 per­cent in Fe­bru­ary from a year ear­lier, while core prices rose 1.8 per­cent from a year ago for the third straight month.

In­fla­tion fears have in­ten­si­fied this year af­ter a re­port last month sug­gested wages were ris­ing more quickly, which can push up prices. Sub­se­quent data have shown that hourly pay gains re­main mod­er­ate. Slug­gish pay in­creases have helped keep in­fla­tion dor­mant for most of the past decade.

Still, Tues­day’s re­port sug­gests that in­fla­tion is slowly mov­ing to­ward the Fed­eral Re­serve’s 2 per­cent tar­get. Core prices have risen at a 3.1 per­cent an­nual rate in the past three months, ac­cord­ing to Cap­i­tal Eco­nom­ics, the largest in­crease in nine years.

And core in­fla­tion will likely jump next month be­cause a sharp drop in the cost of cell phone ser­vices last year will fall out of the year-over-year data. Ian Shep­herd­son, chief econ­o­mist at Pan­theon Macroe­co­nomics, es­ti­mates that could raise core price in­fla­tion to 2.1 per­cent in March from a year ear­lier.


Tues­day’s re­port by the La­bor Depart­ment shows that in­fla­tion is slowly ap­proach­ing the 2 per­cent mark that the Fed­eral Re­serve would like to see.

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