While the consumer price inflation rate has been ruling well below the Reserve Bank of India's medium-term inflation target for some months now, the spurt in inflation rate opens up the possibility of the RBI scrutiny before its next monetary policy meeting.
The consumer-price index, which measures what Americans pay for everything from lipstick to used trucks, rose a seasonally adjusted 0.2% in February, the Labor Department said Tuesday, snapping three consecutive months of flat readings.
A key measure of underlying USA inflation unexpectedly eased in February amid falling prices for autos and prescription drugs, giving the Federal Reserve more room to stick to its plan for being patient on raising interest rates. After a minus 2.33 per cent slump in January, it has now recovered to -0.66 per cent. Food inflation was in the negative at 0.66 per cent.
The January PCE price data will be released on March 19.
Additionally, among the six use-based classification groups, the output of primary goods, which has the highest weightage of 34.04, rose by just 1.4 per cent. Core prices were up 2.1% on the year, a pace last matched in October.
The Fed has a 2 percent target for a separate inflation gauge from the Commerce Department that's linked to consumer spending. Food costs were up 0.4 percent, their largest monthly increase since May 2014, as both the food at home and food away from home indexes increased. Food prices jumped 0.4 percent in February.
A New York Fed survey of consumer expectations published on Monday showed a drop in inflation expectations in February.
Healthcare costs fell 0.2 per cent after five straight monthly increases.
"With nothing in the outlook demanding an immediate policy response and particularly given muted inflation pressures, the [Federal Open Market] Committee has adopted a patient, wait-and-see approach to considering any adjustment in the stance of policy", Fed Chairman Jerome Powell said during a speech in Stanford, Calif., last week. They were held down by a 1.0 per cent decline in the price of prescription medication and a 0.7 per cent drop in the cost of hospital services. There were increases in the prices of motor vehicle insurance, airline fares, household furnishings and personal care products.