MNI DATA ANALYSIS: US February CPI On-Target +0.2%, Core +0.2%>

--Overall CPI Rises To 2.2% Y/Y, Core CPI Stays At +1.8% Y/Y

By Kevin Kastner and Holly Stokes 

     WASHINGTON (MNI) - The February CPI data presented no real 

surprises, allowing analysts to turn their attention to Wednesday's 

retail sales report, data released Tuesday morning showed. 

--CPI ON EXPECTATIONS

     Overall CPI posted a 0.2% rise, as expected, while core CPI also 

came in at 0.2%, on expectations. One positive for inflation watchers 

was how close the overall came to being softer than expected. 

     Unrounded, the month/month rise for overall CPI was +0.15005%, 

close to being rounded down to a 0.1% increase. The unrounded increase 

for core CPI was +0.18176%. 

     Forecasts tend to be fairly accurate for CPI, as the previous four 

February releases have been correct for the overall number, so today's 

data confirm that trend. 

--YEAR/YEAR PRICES ROUGHLY UNCHANGED

     Overall, the data points to contained core consumer inflation, with 

the year/year rate remaining well below the 2% threshold, but it is 

creeping up closer to that point, as the skittish financial markets pay 

close attention. 

     The year/year rate for overall CPI ticked up to 2.2% from 2.1% in 

January, while the year/year rate for core CPI stayed at 1.8%, so 

markets will likely shrug this off and move onto the next key data 

point, retail sales to be released on Wednesday. 

--CORE MEASURES MIXED, ENERGY SOFT

     Within core CPI, owners equivalent rents rose 0.2%, while apparel  

prices jumped by 1.5%. There was some offset by declines in new and used 

vehicle prices and a small drop in medical care, particularly 

prescription drugs. 

     Energy prices rose by only 0.1% in the month after a 3.0% surge in 

January. Gasoline prices fell 0.9% and fuel oil prices fell by 3.6%, 

offsetting small price gains in electricity and natural gas prices. 

Excluding only energy prices, the February CPI would have been still 

been up 0.2%. 

     Food prices were flat in February, with food at home down 0.2% and 

food away from home up 0.2%. 

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

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