WASHINGTON – Consumer prices recorded their largest increase in nearly four years in February as the cost of gasoline surged, but details of the report on Friday showed no sign of a pickup in inflation to trouble the Federal Reserve.
The Labor Department said its Consumer Price Index increased 0.7 percent last month, the largest gain since June 2009, after being flat in January. Gasoline accounted for about three quarters of the spike in consumer inflation.
Economists polled by Reuters had expected the CPI to advance 0.5 percent.
In the 12-months through February, consumer prices rose 2.0 percent, the largest gain since October. They had increased 1.6 percent in January.
Fed officials are likely to dismiss the gasoline-driven jump in price pressures as temporary when they meet next week to evaluate the economy.
Gasoline rose 9.1 percent, the largest gain since June 2009, after falling 3.0 percent in January. Gas prices at the pump, however, have declined in the past two weeks.
Excluding food and energy, consumer prices rose 0.2 percent slowing from January's 0.3 percent advance.
The generally benign underlying price pressures should give the U.S. central bank scope to keep pumping money into the economy, despite signs of improvement in labor market conditions.
The Fed last year embarked on an open-ended bond buying program and said it would keep it up until it saw a substantial improvement in the outlook for the labor market. It hopes the purchases will drive down borrowing costs.
In the 12 months through February, so-called core CPI increased 2.0 percent, also the largest increase since October, after rising 1.9 percent in January.
Last month, food prices edged up 0.1 percent after being flat in January. There is still no sign of a pass-through from last summer's drought.
Housing costs maintained their steady rise. Owners' equivalent rent, which accounts for about a third of the core CPI, rose 0.2 percent after a similar gain in January.
Apparel prices fell 0.1 percent after increasing 0.8 percent in January. New motor vehicle prices fell 0.3 percent after gaining 0.1 percent the prior month.
Prices for used cars and trucks rose for a second straight month.
(Reporting by Lucia Mutikani; Editing by Andrea Ricci)