us feb 2018 cpi - preview
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Monday, 12 March 2018


U.S. inflation has likely increased for the eighth straight month in February, although at slower pace than a month earlier, and will be the last CPI report before Federal Reserve policy makers meet on 20-21 on rates.


The U.S. Consumer Price Index (CPI) is forecast to rise, on average, 0.2 percent month on month in February after increasing 0.5 percent in January.


Year-over-year inflation is likely to have increased at a 2.2-percent pace last month, a notch faster than the 2.1 percent recorded in January. Annual CPI has remained at or above 2 percent for the past half a year.


The monthly core inflation measure, stripped of volatile food and energy prices, is also seen up 0.2 percent  in February, indicating the rise in the headline number had been likely spurred by gains in other categories. The core indicator grew 0.3 percent in January, the most in a year.


"I expect apparel prices to be flat to slightly up in February, but the outsized upward contribution to the core seen in January will not be repeated," said Stephen Stanley, chief economist at Amherst Pierpont Securities, who is looking for a "low" 0.2pct rise.


"Household operations, medical care costs, and auto insurance rates also posted unusually large increases and should have been more restrained in February," he said. "A return to normal in these categories should help to bring the core CPI back to Earth, adding that he is also anticipating both airfares and cell phone service rates to post yet another monthly decline.


Cell phone service costs have been one of the FOMC's key 'transient' factors in keeping the core rate low.


Annual core figure is estimated to have stayed at 1.8 percent for the third consecutive month in February. It would also be the eleventh month of below-two-percent gains in the core year-over-year measure.


The January 0.5-percent monthly spike in inflation, which was also the highest since September 2017, was caused largely by a six-percent rise in gas prices that lifted the entire energy component up to three percent at the beginning of 2018. Signs of continued stability in costs of services, such as accommodation and medical care, also added to the January inflation rise.


U.S. Department of Labor will release official government data on February CPI on 13 March at 1230 GMT. LiveSquawk will cover both reports for its audio and prints services.


Zuzana Jerabek – LiveSquawk News

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