USA consumer prices rose a modest 0.2 percent in February

CPI inflation eases to 4.44% in February 2018 food inflation at 3.26

CPI inflation eases to 4.44% in February 2018 food inflation at 3.26

Both the main consumer price index and the core gauge, which excludes food and energy, rose 0.2% from January, matching the median estimates of economists, a Labor Department report showed Tuesday.

In December, the index of industrial production (IIP) grew 7.1%, while consumer price index (CPI)-based inflation had slowed to 5.1% in January.

Economists surveyed by the Wall Street Journal expected consumer prices to rise 0.2% in February, and core prices to rise 0.2%. The uptick in core prices also matched expectations.

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. The year-on-year rate should thus rise from 2.1% to 2.3%, while remaining at 1.8% for the core CPI.

In men's, price increases of 4.3% in shirts and sweaters and 1.2% in trousers and shorts were partially offset by decreases of 0.8% in furnishings and 0.2% in the suits, sport coats and outerwear group. But faster wage growth should begin to show up this spring, reflecting recently announced wage hikes from Walmart (WMT), Target (TGT), CVS Health (CVS) and Starbucks (SBUX) that didn't happen soon enough for the latest jobs report. Fuel inflation, meanwhile, rose to 6.80% in February 2018 compared to 7.64% in January 2018. Strong IIP growth of 7.5 percent in January; capital goods grow by 14.6 percent; manufacturing at 8.7 percent; infrastructure/construction goods at 6.8 percent.


Gasoline prices fell 0.9 percent in February after rebounding 5.7 percent in January. Sluggish pay increases have helped keep Inflation dormant for most of the past decade.

The mining sector, however, registered negligible growth of 0.1 per cent, as compared to 8.6 per cent rise in January a year ago.

The unemployment rate held steady at a 17-year low of 4.1% in February as the labour force participation rate jumped to 63.0% from 62.7% in January, reflecting increased confidence among jobseekers of finding employment. The food index was unchanged in February, while the energy index increased slightly.

Most analysts and the Reserve Bank of India itself expect inflationary pressures to gather steam in coming months. Over the past 12 months, food prices are up 1.4%.

"Whether this easing sustains or not depends on multiple factors, including the agricultural production as well as the threat of rising crude oil prices on the back of further output cuts". The NFIB survey also showed almost a third of owners reported raising compensation to retain or attract workers last month, the largest share in more than 17 years.

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