Prices in the US rose 6% over the 12 months to February, the Labor Department says, down from 6.4% a month earlier
But the level remains well above the long-term 2% goal
Inflation generally puts pressure on the Federal Reserve to consider further rate hikes to cool prices
But global banking shares remain under pressure as fears persist over the fallout from Silicon Valley Bank’s collapse
The bank – which specialised in lending to technology companies – collapsed last week after a sudden rush of withdrawals
It was followed by New York-based Signature Bank, and the US has guaranteed all deposits at both
President Joe Biden has said the US will do “whatever is needed” to shore up banks after the two banks’ failures raised fears about financial stability
Analysts react to US price data
Analysts’ reactions to the inflation data are starting to pour in.
“The 0.5% m/m [month-on-month] rise in core consumer prices last month adds to the evidence that inflation remains stubbornly high, but the ongoing fallout from the SVB crisis over the coming days is still likely to have a bigger bearing on what happens at next week’s FOMC [Federal Open Market Committee] meeting,” saysAndrew Hunter, deputy chief US economist at Capital Economics.
“Investors will cautiously welcome today’s figures as they show inflation has slowed,” saysRichard Flynn, managing director of Charles Schwab UK.
Unpacking the inflation figures
The details of the monthly inflation report are as important to analysts as the big number – and even though food and petrol are top of mind for most people, economists say other items typically provide a clearer picture of the big trends.
The consumer price index rose 0.5% from January to February, if food and energy was not included. That was a bit faster than expected.
But the Labor Department said housing costs remain the biggest factor pushing up prices – accounting for 70% of the increase.
Most analysts say government figures reports increases in housing prices at a lag, and that the increases currently are less dramatic.
So that could mean inflation pressures in the economy are easing more than the figures suggest.
Source: BBC News