Americans paid more for goods and services in February as surging energy and food prices continued to lift US inflation, the US Labor Department said in a report published Thursday.
The Consumer Price Index (CPI), the government’s main barometer for tracking US inflation, rose higher than expected and continued a streak of sharp increases which began in December. Consumer prices climbed 0.5 percent in February 2011, the most since June 2009 when the monthly price index reached 0.9 percent. Many economists were forecasting an increase of 0.4 percent, matching January’s level.
While most of the items tracked by the Labor Department showed gains, soaring food and energy costs easily led consumer prices.
"Though the seasonally adjusted increase in the all items index was broad-based, the energy index was once again the largest contributor. The gasoline index continued to rise, and the index for household energy turned up in February with all of its components posting increases," the department said. "Food indexes also continued to rise in February, with sharp increases in the indexes for fresh vegetables and meats contributing to a 0.8 percent increase in the food at home index, the largest since July 2008."
Last month food and energy prices were up 0.6 and 3.4 percent, respectively, as compared to 0.5 and 2.1 percent in the previous month. Over the past year, food costs have advanced 2.3 percent while energy prices have surged 11 percent, with gasoline prices soaring 19.2 percent. Prices at the pump were up 4.7 percent in February, capping a string of eight consecutive monthly increases.
Other price increases in February included shelter, medical care, airline fares, transportation, recreation and new and used vehicles. Clothing was one of the few areas to drop. Prices fell 0.9 percent during the month, their biggest decline since July 2006.
Stripping out the more volatile food and energy items, the so-called core US inflation rate rose 0.2 percent in February 2011, the same rate of increase as in January.
US inflation surged 2.1 percent over the past 12 months, up from 1.6% in the year to January. The core US inflation rate rose 1.1 percent from February 2010 against the prior 12-month pick-up of 1.0 percent. The core reading still remains below the Federal Reserves preferred range between 1.6 and 2.0 percent, although by a lesser degree according to some analysts.
"There are signs here the pace of growth has picked up and if the Fed was worried about inflation being too slow, they can forget about it," Stuart Hoffman, chief economist at PNC Financial Services in Pittsburgh, was quoted on Reuters. "What the Fed needs to worry about is inflation expectations because they are much more fickle."
Consumer prices as reported by the US Labor Department follow:
January 2011 Consumer Prices – Gains (%)
|Food at home||.0||0.3||.0||0.3||0.1||0.7||0.8||2.8|
|Food away from home||0.3||0.3||0.1||0.1||0.1||0.2||0.2||1.6|
|Gasoline (all types)||3.9||1.6||4.6||0.7||8.5||3.5||4.7||19.2|
|Utility (piped) gas service||1.1||-2.3||-0.4||-5.7||1.4||-1.2||3.4||-5.9|
|All items less food, energy||.0||.0||.0||0.1||0.1||0.2||0.2||1.1|
|Comm. less food, energy||0.1||-0.2||-0.2||-0.1||.0||0.2||0.2||.0|
|Used cars and trucks||0.7||-0.7||-0.9||-0.5||-0.1||-0.3||0.1||1.9|
|Services less energy||.0||0.1||0.1||0.2||0.1||0.1||0.2||1.5|
The Labor Department’s Consumer Price Index for March 2011 is scheduled for release on April 15, 2011, at 8:30 a.m. (ET). The CPI data is used as the core engine for the US Inflation Calculator.