Consumer Price Index Surges on Energy Costs

Prewar jitters stoked energy costs, causing consumer prices in February to register their biggest increase in two years.

With most other prices well-behaved, however, economists predicted inflation would not turn into a problem for the struggling economy.

The Labor Department reported Friday that the consumer price index, the government’s most closely watched inflation gauge, shot up 0.6% in February -- twice as much as January’s rise.

Most of February’s jump came from energy, whose costs soared before the United States went to war against Iraq. The war having begun, crude oil prices are retreating.

Excluding energy and food prices, the core rate of inflation inched up just 0.1% for a second straight month. That suggested that most other prices are under control, and the nation’s inflation picture looks good.

“Most analysts looking at the CPI report ... will conclude that the war against inflation has been won,” said Stephen Cecchetti, economics professor at Ohio State University.

In February, before war broke out, energy prices jumped by 5.9%, up from a 4% increase in January, the CPI report showed.

Home heating oil prices soared 15.8% in February, and natural gas prices increased 5.5%. Gasoline prices went up 9.9%, the biggest increase since June 2000.

Food prices shot up 0.7% in February, a reversal from a 0.2% decline in January. The rise in food prices last month was the sharpest since June 1996.

Computer prices fell 2.1% in February. Prices for hotel rooms and other lodging dropped 1.8%. Prices for clothing dipped 0.2%. New car and truck prices edged down 0.1%.

Prescription drug prices fell 0.3% in February. Still, those costs are up 3.7% from a year earlier.