Consumer Prices Rose 0.2% in February


Retail inflation falls Feb, industrial output increases in Jan

Gas prices and the cost of hospital services declined, but apparel prices and vehicle insurance rates spiked, which ticked the overall rate higher, Bank of Montreal economist Robert Kavcic noted. Markets now agree with Fed projections for three hikes, though a more aggressive inflation move could trigger additional increases.

Inflation was 17.57 per cent for vegetables, down from 26.97 per cent in January.

The consumer price index increased 0.2% last month, after a sharp 0.5% gain in January, the Labor Department said Tuesday. In the 12 months through February, the CPI rose 2.2 percent, up from 2.1 percent in January as the flat reading from past year dropped from the calculation.

The energy index fell 0.1% in February after a 3.0% gain in January.

Stocks slid as shares of Microsoft, Facebook and Alphabet were down more than 1.5 percent each, top losers on the S&P 500 and the Nasdaq. Key points: * Bloomberg Economics’ expectations for slowing inflation run counter to projections of the central bank.

The dollar slipped against a basket of currencies on the inflation data.

Investors also kept a close eye on the replacement of the country’s secretary of state.

“Nonetheless it is still a useful gauge in establishing when and how the price pressures we’ve been seeing build up in United States supply chains start to filter down into the wider economy”. Food away from home grew 0.2%.

Leading domestic credit ratings agency Crisil said while there is an improvement in the growth-inflation mix in numbers released yesterday, it is unlikely to result in any rate cut by the central bank in the next six months. Fed policymakers have signalled they will hike rates three times this year. The consumer durables sector saw growth accelerating sharply to 8% from 0.86% over the same period. But this could normalize towards 4-4.5 percent range post monsoon, it said. It sees gross value added – a key measure of growth – increasing 7.2% next fiscal year from 6.6% this year.

“Solid domestic economic momentum and the impulse from oncoming fiscal stimulus will underpin a gradual build in inflation toward the Fed’s 2 percent target“, said Gregory Daco, chief economist at Oxford Economics in NY. Concerns surrounding US political and trade tensions were a significant factor in limiting dollar support amid global uncertainty surrounding tariffs and potential retaliation. “With core PCE prices still comfortably below target, the Fed has no reason to get any more aggressive on rate hikes than its current dot-plot foreacst already builds in”.

The food index was unchanged, while prices for food at home decreased 0.2%.

The indexes for shelter, apparel, and motor vehicle insurance all rose and contributed to the one-month seasonally adjusted increase in the all items index.

The core CPI was restrained by a moderation in rents.

New Delhi- India’s factory production grew in January to 7.5 per cent over the same month previous year, and marginally over the 7.1 per cent recorded in December 2017, official data showed on Monday.

Households also paid less for healthcare. The cost of doctor visits, however, rose 0.2 percent. Prices continue move sideways, ahead of U.S. CPI and PPI. The energy index rose 7.7% in the last twelve months. The cost of airline fares rebounded after falling in February.

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