US consumer prices rose modest 0.2 percent
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.