U.S. consumer prices rise 0.4 percent in February

Consumer prices in the United States rose by 0.4 percent in February, reflecting the higher cost of gasoline and food, the Labor Department reported Friday.

The rise in the department's Consumer Price Index, which measures inflation at the consumer level, was double the January increase and the biggest advance since December. Analysts had been expecting a gain of 0.3 percent for consumer prices.

Data showed that energy costs were up 0.9 percent in February after having fallen by 1.5 percent in January. Gasoline prices rose by 0.3 percent, smaller than the advances forecast by analysts.

Food costs surged 0.8 percent in February, the biggest gain in 22 months. Citrus prices jumped by 16.3 percent. The price of fruit and vegetables also increased in the month.

Excluding volatile food and energy prices, core consumer prices rose by just 0.2 percent, exactly what economists had been expecting.

Data also showed that for the first two months of 2007, consumer prices are rising at an annual rate of 3.3 percent, up from a 2.5 percent increase for all of 2006.

Core consumer prices have been rising at an annual rate of 3 percent over the past two months, far above the Federal Reserve's comfort zone of gains of 1 percent to 2 percent in core inflation.

In 2006, core inflation increased by 2.6 percent, the fastest annual pace since 2001.

Source: Xinhua