U.S. Consumer Prices Flat in February

Lower fuel prices kept consumer price index unchanged.

U.S. consumer prices were flat in February, restrained by lower fuel prices, the Labor Department said on March 18. The consumer price index was unchanged from 0.2% in January.

Most analysts had expected a 0.1% rise in February.

Core inflation -- excluding food and energy -- rose 0.1% as expected after a 0.1% decline in January, the first fall in 27 years amid a sluggish economic recovery from recession.

The Labor Department also said that consumer prices were up 2.2% in February from the same month in 2009 while core CPI rose 1.3% during the period.

"Inflation indicators are subdued at the consumer level, which is certainly lending to the Fed's patience in keeping the fed funds rate at the zero bound," said analyst Patrick O'Hare of Briefing.com.

The Federal Reserve's policy body decided to keep the federal funds rate at which banks charge each other for loans at a record low of zero to 0.25% range.

The Federal Open Market Committee (FOMC) said it expected to hold the "exceptionally low" rate "for an extended period" -- reiterating its standard guidance since it slashed rates to record lows in December 2008 in a bid to jolt the world's largest economy from its worst recession in decades.

The Labor Department also said that consumer prices were up 2.2% in February from the same month in 2009 while core CPI rose 1.3% during the period.

Copyright Agence France-Presse, 2010

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