TD Economics March 16, 2012 Data Release: U.S. Consumer Prices move higher in February due to a jump in gasoline The U.S. Consumer Price Index (CPI) rose 0.4% in February, in line with market expectations. Annual inflation now stands at 2.9%, 0.04 percentage points lower with respect to the previous month. Core inflation – a measure that excludes energy and food prices – came out below consensus with a 0.1% increase on the month. As a result, annual core inflation is now down to 2.2% from 2.3% in January. A 2.1% increase in the transportation sub-component – caused mainly by a 6.0% increase in gasoline prices – was the main driver behind the increase in headline CPI. Housing made the second largest contribution, with a monthly gain of 0.1%. Key Implications February’s inflation report did not offer any surprises. A significant jump in gasoline prices pushed headline inflation higher with the rest of the components showing only mild gains. This will likely be the case again next month when we get March’s data, given that gasoline prices are
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