US consumer prices rose 0.1 per cent last month, both overall and excluding food and energy, the US government said today, showing less inflation pressure than Wall Street expected.
A sharp 1.2 per cent decrease in energy costs in February helped keep the consumer price index in check, the Labour Department report showed. In addition, food prices rose just 0.1 per cent.
But even outside of those two often-volatile areas, price increases were mostly moderate.
The department said four-fifths of the slight increase in the core index was due to a 0.4 per cent gain in shelter costs. A 1 per cent drop in clothing prices helped offset that rise.
While the 0.1 per cent rise in overall prices matched expectations on Wall Street, forecasters had expected core prices to increase 0.2 per cent.
Over the past 12 months, consumer prices have risen 3.6 per cent, marking a deceleration from the energy-led 4 per cent gain posted in the period through January.
The 12-month change in the core CPI held steady at 2.1 per cent.
While electricity costs moved up 0.4 per cent last month, petrol prices tumbled 1 per cent, natural gas prices fell 4.5 per cent and the price of fuel oil dropped 2.8 per cent.
The drop in energy prices, which had risen a sharp 5 per cent in January, helped workers keep pace with inflation. The department said inflation-adjusted weekly earnings were flat last month.
However, over the past year workers still have lost some ground, with real weekly earnings down 0.1 per cent.
The report should help ease fears of rising prices in financial markets and at the Federal Reserve, where officials have warned that core inflation was running at the upper end of their comfort zone.
Fed officials are expected to bump benchmark overnight interest rates up by a quarter-percentage point to 4.75 per cent at their next meeting on March 27-28.