Business

US consumer prices rebound in February

Lady filling up her truck with petrol Image copyright AP

US consumer prices rebounded last month as petrol prices rose for the first time since June, official figures show.

The Consumer Price Index rose by 0.2% in February, but remained unchanged from a year earlier, the Department of Labor said.

The monthly rise follows three consecutive months of declines, including a 0.7% drop in January.

Petrol prices rose 2.4% in February, after having fallen by 18.7% in January.

However, oil prices remain volatile, said Ryan Sweet of Moody's Analytics.

"Global oil prices have bounced around and the appreciating US dollar will continue to put downward pressure on core prices," he said.

"The February CPI doesn't increase the odds of the Fed beginning to normalise interest rates in June," he added.

Last week, the US Federal Reserve modified its stance on interest rates, suggesting that it could seek to raise rates in the next few months.

Strong dollar

Economists expect the strong dollar to keep inflation in check in the coming months, as it should make imported goods cheaper.

The dollar has risen sharply in value in the past year against the euro and the yen, as the US economy has grown more quickly than those of Europe and Japan.

Job growth in the US has been robust and the economy is steadily expanding. Typically, that would lead the Fed to raise interest rates from near zero, where they have been since December 2008.

But the CPI is far below the 2% target set by the Federal Reserve, complicating the Fed's decision on when to raise interest rates.

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