Inflation Remained Tame in February

Inflation finally picked up a bit in February after three consecutive months of flat prices. But on an annual basis, price increases have slowed.

The Consumer Price Index rose 0.2 percent in February, the Labor Department said Tuesday. Compared with a year ago, the Labor Department’s Consumer Price Index is up 1.5 percent. On a month-over-month basis, prices have been flat since November.

Despite the monthly gain, this represents a slowdown in year-over-year price gains. In January, prices were up 1.6 percent compared with the prior January. In December, prices were up 1.9 percent compared with the prior year.

The Fed says it aims at a 2 percent target, although it uses a different measure than the Consumer Price Index.

The low and decelerating price gains indicate that the larger budget deficit has not pushed up demand too much in the economy and tariffs on imports are not pinching consumer wallets.