US consumer prices saw their biggest rises in 10 months in February as the cost of petrol spiked, a government report showed today, but there was little sign that underlying inflation pressures were building up.
The Labor Department said its consumer price index increased 0.4% after advancing 0.2% in January. That was in line with economists' expectations.
Petrol accounted for more than 80% of the rise in consumer prices last month, the department said.
Outside the volatile food and energy category, inflation pressures were generally contained. Core CPI edged up 0.1% after gaining 0.2% in January. The February increase was below economists' expectations for a 0.2% rise.
The Federal Reserve said earlier this week that the recent spike in energy costs would likely push up inflation temporarily. Over the long-term, inflation was likely to run at or below the its 2% target, it said.
While the bank reiterated its expectation that overnight interest rates would remain near zero until at least through late 2014, it offered no clues on whether it would launch a third round of bond buying or quantitative easing, to keep borrowing costs low to stimulate the recovery.
Last month, overall inflation was pushed up by petrol prices, which soared 6%, the largest increase since December 2010, after rising 0.9% in January.
Although surging petrol prices are a strain on consumers, they have so far not caused a sharp pull back in spending, thanks to a strengthening jobs market. Food prices were flat last month after rising 0.2% in January. Food prices were the weakest since July 2010.
Overall consumer prices rose 2.9% year-on-year after increasing by the same margin in January. Core consumer prices were last month restrained by clothing prices, which fell 0.9% - the most since July 2006 - after rising 0.9% in January.
There were also declines in the prices of tobacco, airline tickets and used cars and trucks. But new motor vehicle prices rose 0.6%after being flat in January.
While housing costs held up, owners' equivalent rent rose only 0.1% last month after increasing 0.2% the prior month. In the 12 months to February, core CPI increased 2.2% after rising 2.3% in January.
This measure has rebounded from a record low of 0.6% in October and the Fed would like to see that closer to 2%.
