Published: Thu, March 15, 2018
Finance | By Jaime Brady

Food Prices to Moderate Downward Inflation Trajectory

Food Prices to Moderate Downward Inflation Trajectory

In February, the consumer-price index rose 0.2% from a month earlier, easing from a 0.5% gain in January, and was up 2.2% on the year.

The Labor Department said on Tuesday its Consumer Price Index rose 0.2 percent last month after jumping 0.5 percent in January. Over the last 12 months, the index rose 2.2 percent, up from 2.1 percent in January.

Excluding the volatile food and energy components, the CPI gained 0.2 percent after accelerating 0.3 percent in January. Both categories increased for the second straight month after being down in the promotionally charged retail environment in December.

Fed officials target 2% annual inflation based on a separate index, the Commerce Department's gauge linked to consumer spending.

The latest United States employment report showed that average weekly earnings slowed to 2.6% in the year to February, down from 2.8% in the previous month, which was revised lower from the initial estimate of 2.9% - the one that sparked speculations that the Fed could go four or more this year instead of the forward guided three interest rate hikes. This corresponds to central bankers' expectations of a gradual move towards target inflation and raising interest rates three times this year.

A gauge of US business prices rose in February, a sign of modest inflation pressures.

"Inflation is beginning to creep higher, led by services, exactly what you might expect in an economy characterized by a drum-tight labor market", Stephen Stanley, chief economist at Amherst Pierpont Securities, wrote in a research note.

Russian Federation claims successful test of 'invincible' missile
The defence ministry said the missile was launched from a MiG-31 jet that took off from an airfield in south-west Russian Federation on Saturday.

Telangana Assembly-Governor ESL Narasimhan-Congress-Disruption
Later in the Assembly lobbies there was confusion on whether the two Congress MLAs were also disqualified from the Assembly. He said the authorities of the assembly have been directed to go through the records of the proceedings and submit a report.

Messi announces birth of his 3rd son
Barcelona star Lionel Messi and wife Antonella Roccuzzo are blessed with their third child on March 10, 2018. Later in the day, Messi announced that he and his wife had become parents for a third time.

Going forward, we expect overall growth in consumer prices to be benign and end the year at around 1.9%.

February's robust business price increases came on the heels of broad increases in January, suggesting businesses may soon need to raise price tags to compensate for heightened input costs.

A survey of small businesses published on Tuesday showed the share of owners reporting higher selling prices in February hit its highest level since July 2014.

"The increase in the core CPI was driven by various indices, including transportation services and apparel", Matheny said. Most recently, we predicted that increases in rental market supply and vacancies would temper growth in rental prices.

Gasoline prices fell 0.9 percent in February after rebounding 5.7 percent in January. Owners' equivalent rent of primary residence, which is what a homeowner would pay to rent or receive from renting a home, increased 0.2 percent last month after advancing 0.3 percent in January. Prices for new motor vehicles fell 0.5 percent, the biggest drop since August 2009, after slipping 0.1 percent in January.

Meanwhile in the apparel supply chain, fiber prices have been on the rise. Used vehicle and trucks prices declined after four straight monthly increases.

Like this: