Core Consumer Inflation Accelerates, Pushed Up By Rising Housing Costs

Federal Reserve Chairman Jerome Powell appears during a Senate Banking Committee hearing o
AP Photo/Andrew Harnik

Consumer prices increased in February at a slightly cooler rate than in January, data from the U.S. government showed Tuesday.

The Labor Department’s consumer-price index rose 0.4 percent in February, in line with expectations and down from the 0.5 percent gain seen in January. Compared with a year ago, consumer prices are up six percent, lower than the 12-month gain of 6.4 percent recorded in January.

Core consumer prices, which exclude the volatile categories of energy and food, rose by a sharper 0.5 percent. This is faster than the 0.4 percent expected and faster than the January pace of 0.4 percent. Compared with a year ago, core prices are up 5.5 percent, a tick down from the 5.6 percent 12-month increase in January.

Once again, the index for shelter was the largest contributor to the monthly increase in headline inflation, accounting for 70 percent of the overall increase. The indexes for food, recreation, and household furnishings also contributed. Food prices were up 0.4 percent.

The energy index decreased 0.6 percent over the month as the natural gas and fuel oil indexes both fell.

The index for used cars and trucks and the index for medical care were among those that fell over the month.

Excluding food, shelter, and energy prices, consumer prices rose 0.2 percent, matching the prior month’s increase. The index for services excluding rent rose just 0.1 percent, a big step down from the o.6 percent recorded in each of the prior two months.


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