US Inflation Rate Slows to 1%

Consumer prices in the United States went up 1 percent year-on-year in February of 2016, slowing from a 1.4 percent increase in the previous month due to lower energy cost.

Year-on-year, upward pressure came from prices of services less energy (3.1 percent compared to 3 percent in January), namely shelter (3.3 percent compared to 3.2 percent in January), medical care (3.9 percent from 3.3 percent in January) and transportation services (2.6 percent from 2.7 percent in January). Food inflation accelerated to 0.9 percent from 0.8 percent in the previous two months while energy cost shrank 12.5 percent following a 6.5 percent decline in the previous month. 

Annual core inflation which excludes food and energy accelerated for the fourth consecutive month to 2.3 percent, the highest figure since May of 2012.

On a monthly basis, consumer prices declined 0.2 percent, the biggest drop in five months, after being flat in January. The energy index continued to decrease and was the major cause of the decline, more than offsetting increases in the indexes for food and for all items less food and energy. The gasoline index fell sharply, down 13.0 percent, and the indexes for fuel oil and electricity also decreased, though the index for natural gas rose. The food index increased 0.2 percent in February, as the food at home index rose for the first time since September. Major grocery store food group indexes were mixed. 

Excluding food and energy, consumer prices rose 0.3 percent. Increases in the indexes for shelter, apparel, and medical care were the largest contributors to the rise.

US Inflation Rate Slows to 1%

BLS | Joana Taborda |
3/16/2016 1:05:45 PM