The consumer price index rose 0.4 percent after a 0.3 percent increase in January, Labor Department figures showed today in Washington. Excluding food and fuel, the so-called core rate climbed 0.2 percent for a second month.
The increase may ease concern among some Fed policy makers, meeting today, that the deceleration in prices may give way to deflation, or a prolonged drop that hurts profits and makes it harder to repay debt. Still, Chairman Ben S. Bernanke and his colleagues may announce new initiatives to prevent a moderation in inflation from turning into a more lethal drop in prices.
Prices rose 0.2 percent from February 2008, up from no change in the prior 12-month period that was the weakest performance since 1955.
The core rate climbed 1.8 percent from February 2008, after a 1.7 percent year-over-year increase the prior month.
Energy expenses increased 3.3 percent, led by an 8.3 increase in gasoline prices. Still, the fuel's cost is down 36 percent from a year earlier.
Food prices, which account for about a fifth of the CPI, fell 0.1 percent, the first drop since April 2006.
The cost of commodities, excluding food and fuel, rose 0.4 percent, the most since September 1999, indicating the broad- based nature of price increases. New vehicle prices increased 0.8 percent, the most since November 2004, and clothing costs jumped 1.3 percent, the most in almost 19 years.
These increases were only partially offset by cheaper air fares and hotel rates, and smaller increases in rents than in the prior month.
Today's figures also showed wages decreased 0.3 percent in February after adjusting for inflation, and were up 2.5 percent over the last 12 months.
Goods and Services
The CPI is the broadest of the three monthly price gauges from Labor, because it includes goods and services. Almost 60 percent of the CPI covers prices consumers pay for services ranging from medical visits to rent and movie tickets.
Prices aren't falling even as the economy may be in the midst of the worst recession in the postwar era. Retailers boosted post-holiday discounts to attract consumers battered by slumping house and stock values and the highest jobless rate in a quarter century.
Still, economists caution that a deeper economic slump may cause the slowdown in inflation to turn into outright deflation. Longer term, others worry that the unprecedented fiscal stimulus and the Fed's policy of buying more assets and pumping money into the financial system will reignite inflation.
Fed Chairman Ben S. Bernanke said last week the central bank is focused on the economy and would remain vigilant against both deflation and inflation.