Rising gas prices push up inflation for first time in four months
Consumer prices rose in February for the first time in four months as gasoline prices rebounded from a steep fall that had helped to drive down inflation since the middle of last year.
The consumer price index increased 0.2% after a 0.7% drop in January that was the largest decline in more than six years, the Labor Department said Tuesday.
Gasoline prices rose 2.4% in February after falling 18.7% the previous month. The increase in prices at the pump was the first since June.
More broadly, energy prices were up 1% in February following a 9.7% decline the previous month.
Food prices also were up, rising 0.2% after being flat in January.
So-called core inflation, which excludes volatile food and energy prices, increased 0.2% in February, the same as in the previous month.
But the long steep slide in oil prices continued to have an effect on annual inflation. Prices did not rise at all for the year ended Feb. 28.
Gasoline prices were down 32.8% during that time, while overall energy prices fell 18.8%.
“Inflation is likely to slow in March as energy prices have fallen this month, but they do appear to be near a bottom,” said Gus Faucher, senior economist at PNC Financial Services Group.
Federal Reserve Chairwoman Janet L. Yellen has said the extremely low inflation is just temporary, caused by lower oil prices.
But she and other central bank policymakers want to see inflation moving up toward the Fed’s 2% annual target before enacting the first interest rate hike since before the Great Recession.
Low inflation is a problem in Europe as well. On Tuesday, Britain’s Office for National Statistics reported that the nation’s consumer price index was flat for the year ended Feb. 28.
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