Washington, United States – Consumer inflation posted a surprise acceleration in February, US government data showed Tuesday, a development that could give policymakers pause as they mull the timing to start interest rate cuts.
The annual consumer price index (CPI) came in at 3.2 percent last month, the Labor Department said, while the “core” measure stripping out volatile food and energy prices edged down slightly to 3.8 percent.
“The index for shelter rose in February, as did the index for gasoline,” said the Department of Labor in its report.
Combined, both contributed more than 60 percent of the monthly increase for the overall index, the report added.
From January to February, inflation rose 0.4 percent, ticking up from the prior month as well.
Analysts expect the Federal Reserve to focus on underlying inflation when deciding the best time to start reducing rates.
But the “core” measure is still higher than the 3.7 percent analysts expected — and above the Fed’s long-term goal of two percent.
To curb stubborn price increases, the central bank embarked on a series of rapid interest rate hikes in 2022, before holding the level at its highest in more than two decades at recent meetings.
The Fed has signaled it could start reducing rates this year, so long as there is continued progress in lowering inflation.