US consumer prices posted their biggest gain more than two years in February as food costs rose and energy surged on the march to war with Iraq, the government said today.
The Consumer Price Index, the main US inflation gauge, advanced 0.6 per cent last month, the Labor Department said, outstripping the 0.5 per cent increase expected by Wall Street economists. But outside those categories, prices were mostly well-contained, the report showed.
Energy prices shot up 5.9 per cent, the largest increase since June 2000 while food costs staged their biggest rise since June 1996, gaining 0.7 per cent.
The core CPI, which strips out volatile food and energy costs, increased just 0.1 per cent, a bit less than the 0.2 percent economists had expected.
While consumer prices have risen a strong 3.0 per cent over the last 12 months, much of that reflects higher energy costs. The core CPI is up just 1.7 per cent over that period, its smallest 12-month gain in nearly 37 years.
Oil prices rose sharply through February after a now-ended workers' strike in Venezuela cut into supplies and as the United States prepared for war with Iraq.
