US inflation unexpectedly cools on prices for autos, drugs

People walk through The Shops at Columbus Circle mall in New York U.S

People walk through The Shops at Columbus Circle mall in New York U.S

Industrial production slipped to 1.7 per cent in January 2019 from 2.4 per cent in December 2018, manufacturing index was at 1.3 per cent per cent v/s 2.7 per cent month-on-month.

The retail inflation number for February 2019 is the highest since October 2018 when it stood at 3.38 per cent, the data released by the Central Statistics Office under the Ministry of Statistics and Programme Implementation (MoSPI) showed.

Excluding food and energy, the so-called core consumer price index rose 0.1 per cent from the prior month and 2.1 per cent from a year earlier, going by a Labour Department report on Tuesday.

USA consumer prices rose in February as energy and food prices picked up, although the broader trend suggested inflationary pressures remain tame.

The central bank signaled in January that it was moving to the sidelines after raising its short-term benchmark rate four times previous year, most recently in December to a range between 2.25% and 2.50%.

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The Fed has a 2 per cent target for a separate inflation gauge from the Commerce Department that's linked to consumer spending. "Higher energy prices will push up overall inflation, and rising wages will lead businesses to raise prices in an effort to maintain profit margins".

On Tuesday, February's CPI data will be released.

Apparel prices rose 0.3 per cent. The CPI increased 1.6% on a year-on-year basis in January. "We expect the inflation trend to remain firm near 2%". The CPI had been unchanged for three straight months.

A New York Fed survey of consumer expectations published on Monday showed a drop in inflation expectations in February. Annual wage growth jumped 3.4% in February, the biggest increase since April 2009, from 3.1% in January. A decline in core goods prices (-0.2% m/m) was the culprit behind the softness in core inflation. The central bank also changed its policy stance from "calibrated tightening" to "neutral".

Monthly inflation was 0.2 percent compared last month to January after being flat for three months, matching economists' expectations. There were increases in the prices of motor vehicle insurance, airline fares, household furnishings and personal care products.

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