**MNI DATA ANALYSIS: US February CPI As-Expected +0.2%>

--Core CPI +0.1% Vs +0.2% Expected, Owners Equivalent Rent +0.3%

--Year/Year Rates Decline in February; Confirming Fed 'Patient' Stance

By Kevin Kastner, Shikha Dave, and Harrison Clarke

     WASHINGTON (MNI) - The February CPI data were roughly as expected, 

depressing the year/year rates for both overall and core CPI, confirming 

the FOMC's stance that inflation remains "muted." 

     Overall CPI rose by 0.2%, exactly as expected by both the Bloomberg 

and MNI surveys, while core prices were up 0.1%, below the 0.2% gain 

expected. 

     Here are some of the key takeaways from the data released Tuesday:

     - February CPI was up 0.2% (+0.174% unrounded) month/month overall 

on gains in both energy and food prices, as expected. Core CPI was up 

only 0.1%, with apparel and owners' equivalent rent prices leading the 

way, but offset by declines in both vehicle and medical care prices, 

particularly drug prices.

     - Despite the gain for overall CPI, the year/year rate fell to 

+1.5% from +1.6% in January, reflecting base effects from a year earlier. 

Excluding only energy, the year/year rate would have been +2.1% and the 

year/year rate for core prices slowed to +2.1% from +2.2% in January. 

     - Core CPI was +0.110% unrounded, on the high side of +0.1%, with 

the major components generally mixed. The large owners' equivalent 

rents category and apparel prices both rose 0.3%, but medical care were 

down 0.2%, new vehicle prices were down 0.2%, and used vehicle prices 

fell 0.7%. A 1.0% decline in drug prices continued a string of recent 

weak readings.

     - Energy prices rose by 0.4% in February after a 3.1% drop in 

January, with gasoline prices up 1.5%. Electricity prices fell 0.3% and 

gas utilities prices were down 2.4%. CPI excluding only energy was up 

0.2%, while food prices rose 0.4% on both food at home and away from 

home. 

     - MNI analysis showed analysts tend to be very accurate when 

predicting February CPI, so today's data moves with that trend, despite 

the slight overestimate for core CPI. 

     ** MNI Washington Bureau: 202-371-2121 ** 

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