United States: Inflation declines in February, but core inflation picks up
March 16, 2016
In February, consumer prices fell a seasonally-adjusted 0.2% over the previous month. The result came in above the flat figure observed in January and was in line with market expectations. The monthly drop continued to reflect weakness in energy prices, while prices for food increased over the previous month.
Owing to a base effect, inflation fell from 1.4% in January to 1.0% in February. Annual average inflation inched up from 0.2% in January to 0.3% in February.
Core consumer prices, which exclude prices for foodstuff and energy, rose 0.3% in February over the previous month, which matched the 0.3% increase registered in January. The result also overshot market expectations of a 0.2% increase. Core inflation rose from 2.2% in January to 2.3% in February, which marked the highest print in over four years. Annual average core inflation remained unchanged at January’s1.9% in February.
In March, U.S. monetary authorities stated that although inflation picked up in recent months, it remains below the FOMC’s longer-term objective.
Author: Ricardo Aceves, Senior Economist