US consumer prices rose modest 0.2 per cent in February
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WASHINGTON — Consumer prices increased at a modest pace in February, underscoring that inflation pressures appear to be muted for now.
The consumer price index increased 0.2
Inflation fears have intensified this year after a report last month suggested wages were rising more quickly, which can push up prices. Subsequent data have shown that hourly pay gains remain moderate. Sluggish pay increases have helped keep inflation dormant for most of the past decade.
Still, Tuesday's report suggests that inflation is slowly moving toward the Federal Reserve's 2
And core inflation will likely jump next month because a sharp drop in the cost of
The Federal Reserve wants to see inflation at roughly a 2
Clothing prices rose sharply for the second straight month in February, and rents, car insurance and airline fares also increased.
Yet prices are falling for new and used cars. The decline comes after prices for new and used cars jumped last fall as residents of Texas and Florida replaced cars destroyed by hurricanes.
Next week, the Fed is widely expected to raise short-term interest rates for the sixth time since late 2015, when it started lifting rates from nearly zero. Fed policymakers have
Some investors and economists are forecasting the Fed may raise rates a fourth time if economic growth appears to be accelerating more quickly than Fed policymakers expected.
Last week's jobs report, which showed that employers added 313,000 jobs, the most in 1 1/2 years, indicated that such an acceleration may be happening.
"Overall, this report seals another interest rate hike from the Fed at next week's meeting and we continue to expect four hikes in total this year," Paul Ashworth, chief economist at Capital Economics, said.
Still, there were plenty of signs in the jobs report that inflation may remain tame. Hourly pay rose a modest 2.6
The unemployment rate also remained 4.1