Gasoline, rents curb USA consumer price gains in February


Tuesday, the U.S. Labor Department said its U.S. Consumer Price Index rose 0.2% in February, after increasing 0.5% in January.

Prices for all items less food and energy, the "core CPI", grew 0.2% in February, following a 0.3% January increase.

The indices of industrial production for mining, manufacturing and electricity sectors for the month of January 2018 stands at 114.5, 133.8 and 149.5 respectively, with the corresponding growth rates of 0.1 percent, 8.7 percent and 7.6 percent as compared to January 2017.

The energy price index inched up by 0.1% in February after jumping by 3.0% in January, while food prices were unchanged.

The inflation rate is in below expectations as a Reuters survey of 30 economists had predicted it to come at 4.80 per cent. The consumer price inflation could be below 5 percent for the next two months followed by a rebound to 5.8-5.9 percent.

In men's, price increases of 4.3% in shirts and sweaters and 1.2% in trousers and shorts were partially offset by decreases of 0.8% in furnishings and 0.2% in the suits, sport coats and outerwear group.

In the wake of the Great Recession, 2 percent has been the Fed's target for core inflation.

Separately, India's annual industrial output grew 7.5 percent in January, data released on Monday showed, compared with 6.7 percent forecast in a Reuters poll. The next meeting of the Monetary Policy Committee is scheduled on April 4 and 5. Food price inflation was at 4.7% in January.

Along with the Quick Estimates of IIP for the month of January 2018, the indices for December 2017 have undergone the first revision and those for October 2017 have undergone the final revision in the light of the updated data received from the source agencies, as per CSO.

The general index for the month of January 2018 stood at 132.3, thus registering a 7.5 percent growth as compared to January 2017. The reduction in retail inflation has been seen due to cheaper food articles and lower cost for fuel. A second month of cooling consumer prices should act to counter the Reserve Bank of India's hawkish bias, staying its hand in April. That was the opposite of what happened last month, when a jump in prices prompted investors to sell stocks. Fuel oil prices declined 3.6%.

The February release was about as goldilocks as one could hope for, as solid heading payrolls gains and upward back revisions, accompanied by retreat in average hourly earnings and a 4-year high in labor force participation.