Consumer inflation rises to 2.57 per cent in February

Gladys Abbott
March 14, 2019

Industrial production slipped to 1.7 per cent in January 2019 from 2.4 per cent in December 2018, manufacturing index was at 1.3 per cent per cent v/s 2.7 per cent month-on-month.

While the consumer price inflation rate has been ruling well below the Reserve Bank of India's medium-term inflation target for some months now, the spurt in inflation rate opens up the possibility of the RBI scrutiny before its next monetary policy meeting.

The falling price of energy drove U.S. consumer inflation in February to its slowest annual pace more than two years, according to government data released Tuesday.

Economists had predicted consumer price index at 2.43 per cent for February, according to a poll by news agency Reuters.

The Fed, which has a 2 per cent inflation target, tracks a different measure, the core personal consumption expenditures (PCE) price index, for monetary policy.

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Price pressures in the core (excluding food and energy) were a little softer than expected, up only 0.1% in February.

In contrast, deflation in the cost of vegetables and pulses kept food prices subdued.

On Tuesday, February's CPI data will be released. That meant the average weekly paycheck, adjusted for inflation, declined 0.1% from January even though hourly wages rose. The core inflation is expected to be steady around 5.4 percent last month as compared to 5.38 percent a month before. The CPI increased 1.6 percent on a year-on-year basis in January. School tuition and child care costs have increased 3 percent over the past 12 months.

Energy prices rose 0.4 percent, the first increase in four months, as gasoline prices advance 1.5 percent. It hit the USA central bank's 2 percent inflation target in March previous year for the first time since April 2012. Annual wage growth jumped 3.4% in February, the biggest increase since April 2009, from 3.1% in January. The central bank also changed its policy stance from "calibrated tightening" to "neutral". Prices fell for new (-0.2 m/m%) and used (-0.7% m/m) vehicles, prescription drugs (-1.0% m/m), and recreation (-0.4% m/m). The cost of communication services was unchanged in February for a third straight month.

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