The Consumer Price Index noted gains in the prices for car insurance
Washington (AFP) - US 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.
The news could help ease volatility on Wall Street, where fears of inflation and rising rates have spooked investors in recent weeks.
The Federal Reserve is expected to raise its benchmark interest rates next week in the first of at least three hikes expected this year – but market watchers are looking for signs the central bank could act more assertively.
The Consumer Price Index, which tracks the costs of household goods and services, rose 0.2 percent for the month, which matched analyst expectations but was down from January’s sharp 0.5 percent gain.
Year-over-year, the index posted a 2.2 percent gain, above the 2.1 percent recorded in January.
Excluding food and fuel prices, which can see big swings, the index also gained 0.2 percent for the month, with noted gains in the prices for car insurance, rent and apparel.
These were partly offset by a decline in medical costs, with hospital care and prescription drugs both falling in addition to a 0.5 percent drop in mobile phone plan prices, the second monthly decline in a row.
Economists say 2018 is likely to be the year that dormant US inflation finally responds to a decade of steady job creation, falling unemployment and rising incomes.
Central bankers were baffled for much of last year by the weakness of price pressures in the face of the continuing recovery.
Within the February numbers, there were signs that price pressures were running hotter than they had been at this point in 2017.
At a seasonally adjusted annual rate, the price index has gained 4.2 percent so far this year, compared to a gain of only 3.3 percent at the same point last year.
Excluding food and fuel, this measure has risen 3.2 percent so far this year, notably faster than the 2.6 percent reported in the first two months of 2017.