US consumer prices rose in February for the second straight month, suggesting the world's richest economy is growing and interest rate rises may lie ahead.
The Consumer Price Index (CPI), the most widely used inflation gauge, gained 0.2 per cent last month, in line with Wall Street economists' expectations.
Most of the sectors in the index rose last month, with housing prices gaining 0.3 per cent and clothing prices up 0.5 per cent. Energy and transportation costs were the only areas posting declines.
Economists predict any pick-up in consumer prices will be closely watched by the Federal Reserve, which is expected this year to start increasing its federal funds rate, which now stands at a 40-year low of 1.75 per cent.
The bank earlier this week hinted that rate increases were coming when it dropped a 15-month-old warning that weakness posed the biggest threat to the economy. The Fed instead said risks were now more evenly balanced between inflation and weakness. Economists expect interest rate hikes to begin around mid-year.
Although consumer prices have been edging up over the past two months, a separate report from the Labor Department showed weekly earnings fell last month.
According to that report, real average weekly earnings slipped 0.1 per cent in February after holding steady in January.