Updated: 18-Mar-10 09:16 ET
| February CPI |
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| Updated: 18-Mar-10 09:16 ET |
Highlights
- After increasing 0.2% in January, consumer price levels held steady in February.
- The consensus estimate called for an increase of 0.1%.
- Excluding food and energy prices, core CPI increased a miniscule 0.1% in February.
- The increase was in-line with the consensus expectation.
Key Factors
- As with yesterday’s PPI data, the notion of runaway inflation continues to ease with each passing inflation report. None of the CPI data suggest increased inflationary pressures.
- As expected, the drop in gasoline prices (-1.4%) led the energy sector lower (-0.5%) and provided the bulk of the downward pressure on price growth.
- Over the last year, core prices have increased only 1.34%. While the Federal Reserve does not target the CPI directly, its general guideline suggests maintaining a core CPI growth rate of 2.0 – 2.5%. The data confirm that a possible rate hike is well off in the future.
Big Picture
- The February CPI data are pleasing with respect to inflation expectations and fit with the Fed's prevailing view at the moment that exceptionally low levels of the federal funds rate are likely to be warranted for an extended period.
| Category | FEB | JAN | DEC | NOV | OCT |
| All Items | 0.0% | 0.2% | 0.2% | 0.2% | 0.2% |
| Food and Beverages | 0.1% | 0.2% | 0.1% | 0.1% | 0.0% |
| Housing | 0.0% | -0.3% | 0.0% | 0.0% | 0.1% |
| Equivalent Rent | 0.0% | -0.1% | 0.0% | -0.1% | 0.0% |
| Apparel | -0.7% | -0.1% | 0.4% | -0.3% | -0.3% |
| Transportation | -0.1% | 1.3% | 0.7% | 1.3% | 0.9% |
| Vehicles | 0.4% | 0.2% | 0.3% | 0.8% | 1.6% |
| Motor Fuel | -1.4% | 4.4% | 2.3% | 2.7% | 0.3% |
| Medical Care | 0.5% | 0.5% | 0.1% | 0.3% | 0.2% |
| Educ and Commun | 0.2% | 0.3% | 0.2% | 0.0% | 0.2% |
| Special Indices | |||||
| Core | 0.1% | -0.1% | 0.1% | 0.0% | 0.2% |
| Energy | -0.5% | 2.8% | 0.8% | 2.2% | 0.6% |
| Services | 0.1% | -0.2% | 0.1% | 0.1% | 0.2% |
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