Consumer Prices Inched Up in February

Marco Green
March 14, 2018

U.S. consumer inflation rose more slowly in February, cooling from January's sudden jump, with steady gains in clothing prices and rent, the government reported Tuesday.

Consumer food prices rose 3.26 percent in February, compared with 4.70 percent in January, as prices of pulses fell more than 17 percent from a year earlier.

Excluding volatile food and energy prices, the CPI was up 0.2% for the month and 1.8% annualized, unchanged from a month ago.

Stocks slid as shares of Microsoft, Facebook and Alphabet were down more than 1.5 percent each, top losers on the S&P 500 and the Nasdaq. 'As expected, CPI inflation eased to 4.44 percent in February 2018, compared to 5.07 percent in the previous month, with all the components witnessing a decline in prices except for health, clothing and footwear, transport and communication.

The dollar index, which measures the greenback against a basket of currencies, was up 0.2 per cent.

Investors also kept a close eye on the replacement of the country's secretary of state. Within the survey, there were strong readings for capital spending and significant upward pressure on both wages and prices.

Inflation in India slowed for a second straight month, giving the central bank room to keep interest rates on hold for longer while providing relief to battered bond investors. There were still very strong expectations of a rate increase at next week's FOMC policy meeting, with futures markets indicating an 86% chance of a further 0.25% hike in rates.

Prime Minister Narendra Modi, who faces a general election next year, is trying to push up economic growth while keeping inflation under control. But this could normalize towards 4-4.5 percent range post monsoon, it said. Apparel prices rose 1.5% on the month and transportation services increased 1%.

In the women's sector, prices rose in all categories, led by a 4.8% increase in outerwear and a 2.4% hike in suits and separates, while prices for dresses were up 1.9% and tags for the underwear, nightwear, sportswear and accessories group were 1.1% higher. Core prices were up 1.8% on the year.

US consumer prices continued to firm in February, indicating inflation is creeping up toward the Federal Reserve's target without the kind of breakout that would warrant a faster pace of interest-rate hikes.

Inflation rate for "food and beverages" segment moderated to 3.38 per cent in February from 4.58 per cent in the previous month, while the "fuel and light" inflation rate moderated to 6.80 per cent from 7.73 per cent in January, CSO data showed. Over shorter horizons, the core CPI has accelerated. Here though, the 12-month pace should pick up to 2.5% year over year from 2.2%.

Other reports by Click Lancashire

Discuss This Article