Inflation increased 3.2% during the last 12 months, fueling speculation about whether the Federal Reserve will lower interest rates
Economists surveyed by The Wall Street Journal had expected 3.1%.
In a statement, the Labor Department reported that the Consumer Price Index for All Urban Consumers increased 0.4% in February on a seasonally adjusted basis, after rising 0.3% in January,.
The report raised concerns that stronger-than-expected inflation in January was a blip.
The Federal Reserve is balancing trying to ensure that inflation is dropping while trying to keep the job market from declining under the weight of higher interest rates. The Fed’s 2% inflation target is based on the Personal Consumption Expenditures Price Index, which is separate from the commerce department’s data. The former tends to run cooler than the labor department’s index.
The PCE rose faster in January from December than the Fed would have liked, according to the WSJ, and was up 2.4% from a year earlier. The commerce department’s next inflation is set for release March 29.
A rate cut at the Fed’s meeting in the third week of March still appears to be unlikely, with chairman Jerome Powell telling lawmakers that the central bank was not far from being able to make the cut.
