US inflation inched up in February as American consumers felt the pinch at grocery stores but caught a break when paying gasoline and electricity bills, according to the latest US government figures released on Tuesday, March 18, 2014.
Food prices marched at the quickest pace in 2 1/2 years with gains in meats, poultry, fish and eggs the biggest drivers. Lower energy prices took away some of the bite, though there were increases in the cost of fuel oil and natural gas.
Consumer prices rose 0.1% in February, matching the pick-up in January, the Labor Department’s Bureau of Labor Statistics (BLS) said in its monthly report on the Consumer Price Index (CPI). The CPI measures the change in prices that American consumers pay for a select group of goods and services.
In food prices, after rising 0.1% in January they shot up 0.4% in February for the largest increase since September 2011. Meats, poultry, fish, and eggs jumped 1.2% while fruits and vegetables climbed 1.1% after five straight monthly declines. Exceptions to gains included the price of cereals and bakery products which fell 0.4%. On a year-over-year basis, food prices overall went up 1.4%.
As for energy prices, they declined 0.5% in February and are 2.5% lower than a year ago. Within the energy grouping are prices at the pump. The price of gas retreated 1.7% for the month and has declined 8.1% from last year. The cost of electricity dipped 0.2% in February but is still up 3.8% annually. On the flip side, rising on the month were fuel oil and natural gas, advancing 4.1% and 3.6%, respectively.
Pulling out food and energy prices which are the most volatile, so-called core consumer prices also advanced 0.1% in February to match January’s increase. The biggest gainers included:
- Shelter and rent, up 0.2%
- Lodging away from home, up 0.6%
- Medical care commodities, up 0.6%
- Medical care services, up 0.2%
- Airfares, up 1.3%
- New vehicles, up 0.1%
Meanwhile, the index for household furnishings and operations retreated 0.4%, the price of clothing fell 0.3%, the cost of used cars and trucks dropped 0.1%, the price of alcohol declined 0.3% and the cost of tobacco dipped 0.1%.
US inflation rose 1.1% in the past 12 months. This annual inflation rate snaps a streak of firming increases that started three months earlier. Recent inflations rates reported by the government include 1.2% in the 12 months ended November, 1.5% through the 12 months ended December and 1.6% in the 12 months ended January.
Core US inflation advanced 1.6% in the year-over-year period through February, which is the same 12-month reading as January.
"Firms are reluctant to raise prices given that demand is still not where we want it to be," Bloomberg News quoted Gus Faucher, senior economist at PNC Financial Services Group Inc. in Pittsburgh, who correctly projected the rise in consumer prices. "The Fed has made it clear that they’re concerned about inflation being too low rather than too high."
The annual core inflation rate is the benchmark inflation figure watched by the Federal Open Market Committee (FOMC) as it helps in deciding where to set the key interest rate. The 1.6% increase is below the Fed’s target inflation rate of 2%. Until January, the 1.6% mark was the lowest annual change since June.
"The underlying trend shows there is not a lot of inflation. The Fed has to acknowledge that the transitory factors are more entrenched since inflation has run below their target for about two years," Reuters quoted Michael Hanson, a senior economist at Bank of America Merrill Lynch in New York.
Found below is a table of percentage changes in prices of major consumer goods and services that are surveyed and analyzed by the Bureau of Labor Statistic of the US Department of Labor. The data periods are from August through February and over the past 12 months.
August 2012 – February 2014 Consumer Prices – Gains & Losses in Percent
|Aug 2013||Sept 2013||Oct 2013||Nov 2013||Dec 2013||Jan 2014||Feb 2014||12 Month|
|Food at home||0.1||.0||.0||.0||.0||0.1||0.5||0.9|
|Food away from home||0.2||0.1||0.1||0.3||0.1||0.1||0.3||2.2|
|Gasoline (all types)||-0.5||-0.2||-1.6||-0.8||2.6||-1.0||-1.7||-8.1|
|Utility (piped) gas service||-1.8||1.6||-0.5||-1.5||-1.0||3.6||3.6||8.3|
|All items less food, energy||0.1||0.1||0.1||0.2||0.1||0.1||0.1||1.6|
|Commodities less food, energy||.0||-0.1||-0.1||.0||.0||-0.1||-0.1||-0.4|
|Used cars and trucks||-0.1||0.3||0.4||0.3||.0||-0.5||-0.1||0.6|
|Services less energy||0.2||0.2||0.2||0.3||0.1||0.2||0.2||2.2|
US inflation data is published by the BLS about two weeks into a month after analyzing data collected by the end of the reference month. The release of February inflation in the form of the Consumer Price Index (CPI) is scheduled to next happen on Tax Day, April 15, 2014.
The CPI is used to calculate inflation rates and it is also used by this site’s Calculator for US Inflation. The Inflation Calculator shows accumulated inflation and the change in buying power of the US dollar between two dates.