US 12-month consumer inflation highest in 5 years, up 2.7%

Washington (AFP) –


US consumer prices in February rose at the fastest pace in nearly five years compared to the same month of 2016, while retail sales also were robust, the government reported Wednesday.

The Consumer Price Index, which tracks changes in the costs of goods and services for individuals, rose only 0.1 percent over January, the Labor Department reported.

But CPI jumped 2.7 percent over the past 12 months, the largest annual increase since March 2012.

This is the last key piece of data before the Federal Reserve is expected to raise interest rates at the conclusion of a two-day meeting later Wednesday, largely to stave off rising inflation.

Analysts were expecting the modest month-to-month CPI gain, after January's big 0.6 percent increase, which was the largest monthly rise since 2013.

Falling gasoline prices offset rising prices for food, housing and recreation last month.

Excluding the more volatile categories of food and fuel, the so-called core CPI rose 0.2 percent, as expected, reflecting rising costs in clothing, air travel and medical care.

The 12-month core index was up 2.2 percent, and has remained within a range of 2.1 percent to 2.3 percent for 15 consecutive months.

Meanwhile, the Commerce Department reported that retail sales last month were 5.7 percent above February 2016.

However, sales slowed in February compared to the prior month, with electronics and appliance stores seeing their steepest decline in more than five years.

US consumers shelled out $474 billion in stores and restaurants, an increase of just 0.1 percent over January, matching an analyst forecast.

Auto sales appeared to drag on the monthly results, as sales were up 0.2 percent excluding motor vehicles.

Furniture and home furnishing stores saw sales rise 0.7 percent for the month, reflecting brisk pace of homes sales.

Unusually warm weather may have kept consumers out of already struggling clothing stores, which saw sales plummet 0.9 percent, the biggest monthly decrease in a year.

Electronics and appliance stores nosedived 2.8 percent for the month, the biggest monthly drop since December 2011, and were down six percent from February of last year.