WASHINGTON; (Reuters) – Consumer prices rose in February in the United States due to higher gasoline and housing prices, suggesting some persistence in inflation that could prompt the Federal Reserve (Fed ) to delay the reduction of interest rates.

The consumer price index (CPI) increased by 0.4% last month compared to January (+0.3%), announced the Labor Department, but its increase over one year was established to 3.2% after a gain of 3.1% in January.

Economists polled by Reuters on average forecast a 0.4% month-on-month increase and a 3.1% annual increase.

Gasoline and housing, which includes rents, contributed more than 60% to the monthly increase in the CPI.

The annual rise in consumer prices has slowed since peaking at 9.1% in June 2022, but this trend has been interrupted in recent months.

Inflation accelerated in January, largely due to price increases by service providers earlier this year, which economists say were not fully captured by the model used by the government to eliminate seasonal fluctuations in data.

Owners’ Equivalent Rent (OER), a measure that estimates how much rent a homeowner would have to pay if they were to rent out their own home, has also jumped and diverged from rents, which is partly explained by changes in methodology made by the government.

The “core” CPI index, known as core inflation, which excludes the volatile prices of energy and food products, reached 0.4% over one month, compared to 0.4% in January and a consensus by 0.3%.

Over one year, the “core” CPI index increased by 3.8% after an increase of 3.9% in January, and against a consensus of 3.7%. This is the smallest year-over-year increase in the index since May 2021.

Before the data was released, financial markets estimated a roughly 70% chance that the Fed would cut rates in June.

(Report by Lucia Mutikani, by Diana Mandiá, edited by Claude Chendjou and Kate Entringer)

Copyright © 2024 Thomson Reuters