Consumer prices rise slightly despite higher food prices

WASHINGTON, March 18 (UPI) -- Consumer prices held steady, only a 0.1 percent rise, despite higher food prices and increasing housing costs, with inflation remaining in check.

The Labor Department reported Tuesday that the consumer price index rose by a seasonally adjusted 0.1 percent in February and the index increased 1.1 percent for the previous 12 months. The figure is well below the Federal Reserve's 2 percent estimate and matched the forecast made by a group of economists polled by MarketWatch.

The price of food jumped 0.4 percent -- the largest jump since September 2011 -- because of higher costs of meat, poultry, fish and vegetables. The increasing cost of groceries led to a 0.5 percent increase in February in the index for food at home. The energy index was pretty much stable, with rising fuel oil and natural gas prices offset by a decrease in the gasoline index. The consumer price index and housing data released Tuesday are the last economic indicators to come out before the policymaking Federal Open Market Committee meets to consider changes to monetary policy. The Federal Reserve will also use these indicators to decide the future course of action with regards its bond buying program.

Fed officials are expected to announce Wednesday that economic fundamentals are strong enough to allow a drawback of their bond buying program. Critics of the bond buying program were concerned that the steady flow of easy money would drive prices, but those concerns seem to have been laid to rest with the release of Tuesday's numbers.

[Labor Department] [LATimes]