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Consumer prices broadly remained unchanged in February, holding steady just before war with Iran rattled markets and threatened to wear a hole in Americans’ pocketbooks, government data shows.<\/p>\n
The Consumer Price Index increased 0.3% in February on a monthly basis and 2.4% over last year, matching economists’ expectations while showing little change from January’s cooler-than-expected print, according to the Bureau of Labor Statistics’ inflation report released Wednesday.<\/p>\n
On a “core” basis, excluding volatile energy and food categories, consumer prices rose 0.2% from a month earlier and 2.5% from a year ago, also matching economists’ predictions.<\/p>\n
But Wednesday’s report comes with a big caveat: The data covers the period before the war with Iran broke out, which is raising gas prices and fueling concerns about higher utility bills.<\/p>\n
“Today\u2019s CPI report is already something of a historical artefact,” Seema Shah, chief global strategist at Principal Asset Management, said in a statement. “<\/strong>With oil prices up roughly $30 in recent weeks \u2014 and potentially heading toward triple digits \u2014 investors are far more focused on how the conflict feeds into inflation over the months ahead.”<\/p>\n As of February, electricity prices had already increased 4.8% from last year, government data shows, while natural gas prices had increased 10.9% over the same period. Gasoline prices fell 5.6% on an annual basis in February \u2014 but have jumped 60 cents a gallon on average since this time last month.<\/p>\n Read more: <\/em>How oil price shocks ripple through your wallet, from gas to groceries<\/em><\/p>\n The data “offers some reassurance that underlying inflation pressures were not moving in the wrong direction before the latest energy shock,” Shah said.<\/p>\n Other concerns about the pace of price increases remain, however.<\/p>\n The Federal Reserve’s preferred gauge of inflation \u2014 the Personal Consumption Expenditures index, which includes spending on behalf of consumers for things like employer-based health insurance \u2014 ran a bit hotter than expected in December, posting a 2.9% annual increase. That’s well above the Federal Reserve’s target of 2%, and economists see that pace holding in January’s data, set for release Friday.<\/p>\n Meanwhile, the labor market also appears to be on shaky ground after unexpectedly losing 92,000 positions last month, pushing the unemployment rate up to 4.4%. That’s further complicating the Federal Reserve’s rate deliberations as policymakers weigh higher oil prices and inflation amid conflict with Iran, coupled with a soft job market.<\/p>\n<\/p><\/div>\n