The consumer price index rose by 0.4% in February, its strongest pace since April. The majority of the increase was due to rising gasoline prices as core prices only raised by 0.1. The year ago change in core CPI dropped to 2.2% from 2.3%, this is within the range acceptable to policymakers.
The energy index rose 3.2% in February due to surging gasoline prices. Appreciation in food prices stopped in February, down from two consecutive month of 0.2% growth. Core CPI growth was led by both goods and services prices, rising 0.1% over the month each. Goods prices compared to one year ago appreciated 2.0% down from 2.2% reported in January. Services prices saw a similar slowing from 2.3% in January to 2.2% in February.
Despite spikes in energy prices, core CPI continues to grow at a steady rate that is considered healthy by policymakers. Forward indicators are also encouraging that the strong level of inflation seen over the past year is set to slow. Oil prices are likely to fluctuate with events in the strait of Hormuz, despite some hints that leaders could release supplies from the strategic petroleum reserves.
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