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Newhampshire News Online

Consumer prices show first increase in 4 months

Consumer prices show first increase in 4 months

Consumer prices in February posted their first increase in four months as gasoline costs edged up after a series of declines. The consumer price index increased 0.2%, the Labor Department said Tuesday, in line with the rise expected by economists surveyed by Action Economics. Over the past year, prices were unchanged. Core prices, excluding food and energy, were up 0.2%. Economists expected a 0.1% increase. Core prices are unchanged the past year.635627225539447753-BLM-AMERICAN-APPAREL

In January, overall prices declined 0.1% during the previous 12 months, the first annual drop since October 2009. Last month, gasoline prices increased 2.4%, while food was up 0.2%. Also rising were apparel prices by 0.3%; new car prices, up 0.2%; airline fares, by 0.2%; and rent by 0.3%. Medical care costs dropped 0.2%.

The Federal Reserve is closely monitoring inflation for signs that it’s picking up from a feeble pace fueled largely by low gasoline prices, stagnant wages and a strong dollar that’s making imports cheap. The Fed last week signaled that it could raise its benchmark interest rate within months on falling unemployment, but it also indicated it’s in no rush to act until it is confident that inflation will edge up toward its 2% annual target over the medium-term.

In the months ahead, rising wages are expected to push up prices while the strong dollar continues to temper inflation, economist Paul Ashworth of Capital Economics wrote in a note to clients. “As the dampening effect from the stronger dollar fades in the second half of this year, we would expect to see core inflation gradually strengthen,” he said. By the first half of 2016, he said, inflation should climb back toward the Fed’s 2% target.

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