US consumer prices go up as expected in February

[WASHINGTON] US consumer prices picked up in February, as the cost of petrol increased in anticipation of an escalating war in the Middle East.

With the conflict driving up oil prices, a further rise in inflation is expected in March.

The Consumer Price Index (CPI) rose 0.3 per cent in February after gaining 0.2 per cent in January, the US Labor Department’s Bureau of Labor Statistics said on Wednesday (Mar 11).

Economists polled by Reuters had forecast the index climbing 0.3 per cent. Petrol prices, as stated in the CPI report, had declined for two straight months.

Prices at the pump have jumped by more than 18 per cent to US$3.50 a gallon since the US-Israel war on Iran started at the end of February, data from motorist advocacy group AAA showed.

Oil prices shot up well above US$100 a barrel, before pulling back on Tuesday after US President Donald Trump stated the conflict could end soon.

The CPI also rose amid the continued, but staggered pass-through from his sweeping tariffs, which he pursued under a law meant for use in national emergencies.

It has since been struck down by the US Supreme Court.

In the 12 months until February, the CPI advanced 2.4 per cent and matched January’s increase, reflecting the high readings in 2025 dropping out of the calculation.

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The Federal Reserve tracks the Personal Consumption Expenditures (PCE) price indexes for its 2 per cent inflation target, and is expected to keep interest rates unchanged in the third week of March.

Though businesses have absorbed much of the import duties, economists said they were unlikely to continue doing so – citing, among others, persistently higher readings of input costs in the Institute for Supply Management surveys.

Trump has responded to the US Supreme Court ruling by imposing a 10 per cent global tariff, which he said would rise to 15 per cent.

Excluding the volatile food and energy components, the CPI gained 0.2 per cent after rising 0.3 per cent in January.

The so-called core CPI inflation was curbed by a decline in used motor-vehicle prices, as well as smaller increases in rents.

In the 12 months until February, the core CPI inflation increased 2.5 per cent after rising by the same margin in January, also reflecting favourable base effects.

Economists said the tame core CPI readings were unlikely to translate into moderate core PCE inflation gains in February, because of different weights and unexpected strength in services prices in the January Producer Price Index report.

January’s delayed PCE price index data due on Friday is expected to show a solid increase in core inflation. February’s PCE inflation data will be released on Apr 9. REUTERS