U.S. consumer prices slow as gasoline falls, rents moderate

From Reuters - March 13, 2018

WASHINGTON (Reuters) - U.S. consumer price growth slowed in February amid a decline in gasoline prices and a moderation in the cost of rental accommodation, the latest indication that an anticipated pickup in inflation probably will be only gradual.

The Labor Department said on Tuesday its Consumer Price Index rose 0.2 percent last month after jumping 0.5 percent in January. In the 12 months through February, the CPI rose 2.2 percent, up from 2.1 percent in January as the weak reading from last year dropped from the calculation.

Excluding the volatile food and energy components, the CPI gained 0.2 percent after accelerating 0.3 percent in January. The year-on-year increase in the so-called core CPI was unchanged at 1.8 percent in February.

While there is evidence of building inflationary pressures in certain components, the annual growth rates, especially for the core CPI, do not suggest a breakout in inflation yet, said Ben Ayers, senior economist at Nationwide, in Columbus, Ohio.

Last months increase in consumer prices was in line with economists expectations. The Federal Reserve tracks a different index, the personal consumption expenditures price index excluding food and energy, which has consistently undershot the central banks 2 percent target since mid-2012.

The CPI report came on the heels of data last Friday showing a deceleration in wage growth in February as well as a downward revision to Januarys increase in average hourly earnings.Average hourly earnings rose 2.6 percent on an annual basis in February, stepping down from Januarys 2.8 percent increase.

The dollar pared gains versus the yen and extended losses against the euro. Prices for U.S. Treasuries were trading higher. U.S. stock index futures rose.

Against the backdrop of a tightening labor market and strong economy, the Fed is widely expected to increase interest rates at its March 20-21 meeting. But steady inflation gains suggest the U.S. central bank will probably not change its interest rate forecast at next weeks policy meeting.



Continue reading at Reuters »