Published: Wed, March 14, 2018
Culture&Arts | By Laurence Reese

Consumer Prices Rose 0.2% in February

Consumer Prices Rose 0.2% in February

The overall consumer price index rose 0.2% on the month and 2.2% from a year ago, matching expectations.

The index for all items less food and energy increased 0.2 percent in February following a 0.3-percent increase in January.

Average hourly earnings edged up four cents, or 0.1 percent, to $26.75 in February, a slowdown from the 0.3 percent rise in January.

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USA consumer price index (CPI) data is due at 1230 GMT.

The latest USA employment report showed that average weekly earnings slowed to 2.6% in the year to February, down from 2.8% in the previous month, which was revised lower from the initial estimate of 2.9% - the one that sparked speculations that the Fed could go four or more this year instead of the forward guided three interest rate hikes. Economists had expected consumer prices to rise by 0.2%. There's downside bias to 5.1-5.6% inflation forecast for H1FY19 too, it said, adding that February CPI should put to rest concerns about upward spiral in bond yields. In fact, the exceptional 1.7% increase in prices for clothing observed in January - the highest monthly increase since February 1990 - was probably owed to the winter weather, whereas price discounts were more likely again in February given the mild temperatures.

Separately, India's annual industrial output grew 7.5 percent in January, data released on Monday showed, compared with 6.7 percent forecast in a Reuters poll. That jump helped fuel inflation scares and contributed to a quick correction in the stock market that saw major indexes fall more than 10%.

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Growth in the Index of Industrial Production quickened to 7.5% in January from 7.07% in December. The S&P 500 increased 12.68 points, or 0.46 percent, to 2,795.70.

Retail inflation still remained above the 4 per cent medium-term target of the Reserve Bank of India (RBI), strengthening views that it will hold rates steady at its April meeting rather than raise them. It is expected to show an increase of 0.2%, well below last month's 0.5% increase.

Gas prices and the cost of hospital services declined, but apparel prices and auto insurance rates spiked, which ticked the overall rate higher, Bank of Montreal economist Robert Kavcic noted. "Although previous year we faced a disconnect between the continued strengthening in the labor market and the step-down in inflation, mounting tailwinds at a time of full employment and above-trend growth tip the balance of considerations in my view", Fed Governor Lael Brainard said last week.

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