Financial News: U.S. Consumer Prices Increase 0.4% In February, In

U.S. Consumer Prices Increase 0.4% In February, In Line With Estimates

03/14/2023 - 09:51:00 (RTTNews)

(RTTNews) - Consumer prices in the U.S. increased in line with economist estimates in the month of February, according to a report released by the Labor Department on Tuesday.

The Labor Department said its consumer price index rose by 0.4 percent in February after climbing by 0.5 percent in January. The advance by the index matched expectations.

A 0.8 percent advance by prices for shelter accounted for over 70 percent of the increase in consumer prices, while higher prices for food, recreation, and household furnishings and operations also contributed.

Core consumer prices, which exclude food and energy prices, increased by 0.5 percent in February after rising by 0.4 percent in the previous month. Economists had expected core prices to rise by 0.4 percent.

"The 0.5% m/m rise in core consumer prices last month adds to the evidence that inflation remains stubbornly high, but the ongoing fallout from the SVB crisis over the coming days is still likely to have a bigger bearing on what happens at next week's FOMC meeting," said Andrew Hunter, Deputy Chief U.S. Economist at Capital Economics.

The report also showed the annual rate of consumer price growth slowed to 6.0 percent in February from 6.4 percent in January.

The year-over-year growth, which was in line with economist estimates, marked the smallest 12-month increase since September 2021.

The annual rate of growth by core consumer prices edged down to 5.5 percent in February from 5.6 percent in January.

"At face value, the ongoing strength of inflation presents a dilemma for the Fed as it focuses on maintaining financial stability," said Hunter.

He added, "But even if the current crisis ends up being resolved relatively quickly, we suspect the resulting tightening in credit conditions will still do lasting damage to the economy."

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