U.S consumer prices increase slightly in February due to higher food costs

The U.S Bureau of Labor Statistics released its monthly report on consumer prices on Wednesday. According to the data, the consumer price index (CPI) gained slightly in February attributed to higher prices for food.

The Labor Department announced a 0.1% growth in the U.S consumer prices in February that came in line with the increase recorded in January. The data also came stronger than the analysts’ forecast of no improvement (0.0%) in the CPI. On a year over year (YoY) basis, February’s CPI marked a 2.3% increase.

U.S Core CPI Gains 0.2% In February And 2.4% On A YoY Basis

Excluding volatile components like food and energy, the so-called core CPI gained 0.2% in February. Last month’s reading for core-CPI matched with that of December’s as well as the experts estimate of 0.2% growth in the core CPI. Wednesday’s data further highlighted a 2.4% gain in the monthly core CPI in February as compared to the same month last year.

Inflation in the United States has remained mild in over a decade after the end of the Great Recession. As per Wednesday’s data, a similar trend was seen in February on the inflation front. While the unemployment figure has recently dropped to a record low in the past fifty years, the increase in wages still lacks the pace required to push employers into boosting prices directed at covering the rising costs of labor.

The slight increase in U.S consumer prices in February also stemmed from used cars, clothing, and medical care. Prices for gas and airline fares, on the contrary, posted a significant drop last month.

Figures From Different Sectors In February

In terms of price gains, the U.S services sector served a central role instead of goods in February. Costs associated with medical care recorded a 5.4% increase in 2019 while a 3.3% gain was noted in rents in the past year.

The growth in new car prices remained marginal in 2019 at 0.4% while a 0.9% decline in clothing prices was recorded last year.

With rising strength in the U.S dollar index, the daily trend in the EUR/USD currency pair was seen bearish on Wednesday. The pair dropped from a high of 1.1365 to a low of 1.1255. Much of the loss, however, was recovered later in the day following Treasury Secretary Steven Mnuchin’s address and President Donald Trump’s speech.

At the time of writing, EUR/USD is exchanging hands at 1.1315 in the forex market.