Economy

US core inflation unexpectedly cools on autos, drug prices

US core inflation unexpectedly cools on autos, drug prices

Lower food prices halved India's retail inflation in February 2019 to 2.57 per cent, from 4.44 per cent during the corresponding month of previous year, official data showed on Tuesday.

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.

Retail inflation rose to a three-month high of 2.57 per cent in February from 2.05 per cent last month on the back of modest spike in food and fuel prices. A growth of 2.0 per cent for January was predicted by a Reuters poll of economists.

Food inflation based on CPI, however was in negative at 0.66 per cent.

A KEY measure of underlying United States inflation unexpectedly eased in February amid falling prices for cars and prescription drugs, giving the Federal Reserve more room to stick to its plan to be patient about raising interest rates. The January PCE price data will be released on March 19 after being delayed by a 35-day partial shutdown of the federal government that ended on Jan. 25.

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Apparel prices rose 0.3 per cent.

Core inflation numbers, however, remain sticky at above 5 per cent and prices for most services are rising at above 6 per cent, reflecting pickup in demand conditions and pricing power, particularly in urban economy, she said. The CPI increased 1.6 percent on a year-on-year basis in January.

Prices of fruits (-4.62 per cent) and vegetables (- 7.69 per cent) continued to decline in February. Core CPI is anticipated to have jumped 0.2% from last month and 2.2% from a year ago, according to economists polled by Bloomberg. The central bank also changed its policy stance from "calibrated tightening" to "neutral". It hit the USA central bank's 2 percent inflation target in March past year for the first time since April 2012. The consumer-price index follows the Labor Department's latest employment report, which showed average hourly earnings for private-sector workers rose 3.4% in February from a year earlier, a pace last matched in April 2009.

A New York Fed survey of consumer expectations published on Monday showed a drop in inflation expectations in February. The so-called core CPI had increased by 0.2 percent for five straight months.

But prices for new motor vehicles, used cars and trucks, as well as recreation fell.