US headline inflation held unchanged at 2.4pc in February, the lowest level since early last year, before the US-Iran conflict sent energy prices surging to levels that are likely to prompt Federal Reserve policymakers to delay any potential cuts in borrowing costs.
The consumer price index (CPI) held unchanged following a similar 2.4pc annual gain in January. It was the lowest monthly reading since April last year. October of last year was not reported due to the partial federal government shutdown.
So-called core inflation, which strips out food and energy, rose at an annual 2.5pc pace, also unchanged from January.
"Inflation remains too firm for now for the Federal Open Market Committee to consider providing more support to the labor market, but the picture will look very different later this year," Pantheon Macroeconomic's chief US economist Samuel Tombs said in a note. "Looking ahead, the average retail gasoline price looks set to soar to $3.80, from $3.05 in February, if the WTI oil price stabilizes at $85. That implies a 20pc jump in CPI gasoline prices in March."
The US Energy Information Administration (EIA) predicted Tuesday that the US light sweet crude benchmark will average nearly $85/bl in the second quarter of this year because of the fighting in the Middle East. Crude prices have surged from about $65/bl in late-February to nearly $120/bl on 9 March as the US-Israel war with Iran has choked off flows through the strait of Hormuz. Prices on Tuesday eased to near $83/bl, after US president Donald Trump said the war was practically over.
Services less energy services, considered a core measure of services, held unchanged at 2.9pc in February from the prior month.
Gasoline falls by 5.6pc
The energy index rose by a 0.5pc annual pace in February after falling by a 0.1pc annual pace in January.
Gasoline declined by an annual 5.6pc after falling by 7.5pc a month earlier. The fuel oil index rose by 6.2pc after falling by 4.2pc in the 12 months ended in January.
Energy services rose by 6.3pc in February following a 7.2pc gain in January. Piped natural gas was up by 10.9pc after a 9.8pc gain the prior month. Electricity rose by 4.8pc after a 6.3pc gain the prior month.
Shelter rose by 3pc from a year earlier in February, matching the prior month's gain.
Medical care services rose by 4.1pc in February, accelerating from 3.9pc the prior month.
Transportation services rose at a 2.2pc annual rate, accelerating from 1.3pc pace in January.
New vehicles rose at a 0.5pc annual rate, quickening from a 0.4pc annual rate during the prior month.
Used vehicles fell by 3.2pc in February, following a 2pc decline a month earlier.
Seasonally adjusted, CPI accelerated by 0.3pc in February from the prior month's 0.2pc gain, the US Bureau of Labor Statistics said.
