Washington, Apr 9 (AP) A key measure of inflation stayed high in February, before the war in Iran spiked gas prices, a sign that everyday costs were elevated even before the conflict began.
An inflation
gauge monitored by the Federal Reserve rose 0.4 per cent in February from January, up slightly from the previous month. Compared with a year ago, prices rose 2.8 per cent, the same as January.
Thursday’s data was delayed by a backlog of economic reports created by the six-week government shutdown last fall.
Excluding the volatile food and energy categories, core inflation also rose 0.4 per cent in February from January, and it was 3 per cent higher than a year earlier. The annual figure is slightly below January’s reading of 3.1 per cent.
Still, the monthly increases are at a pace that if continued for a whole year, would easily top the Fed’s 2 per cent inflation target.
Thursday’s report is largely a warm-up for the more important inflation data to be released Friday, when the government will publish the higher-profile consumer price index for March.
The Friday report will be the first to reflect the impact of the gas price spike from the Iran war. Economists forecast it will show a big increase of 0.9 per cent just in March from February, and a 3.4 per cent gain from a year earlier. The annual figure would be a big increase from 2.4 per cent in February.
The large jump in inflation in March will heighten concerns at the Fed that prices are moving further away from their inflation target and make it much less likely the central bank will cut rates anytime soon.
At their most recent meeting last month, some Fed officials supported opening the door to the potential for rate hikes if inflation didn’t show signs of improving. (AP) NPK NPK
