Despite a sharp jump in food costs, consumer prices increased just 0.1 percent last month, in an indication inflation remains in check, the Labor Department said Tuesday.
In the previous year, the consumer price index had risen 1.1 percent. The figure is well below the Federal Reserve’s 2 percent annual targe,t as central bank policymakers gather for a two-day meeting this week.
February’s increase was in line with analyst expectations and matched the previous month’s rise. The one-year inflation rate also remained the same as in January.
Driven by the drought in California and elsewhere, food prices surged 0.4 percent last month, the biggest increase since September 2011. Groceries were up 0.5 percent in February.
But the increase was offset by a 0.5 percent decline in energy prices. A big part of that was a 1.7 percent drop in gasoline prices.
The cost of clothes and other apparel also was down 0.3 percent.
Taking out the often-volatile food and energy costs, prices rose 0.1 percent in February. For the previous year, that so-called core inflation rate was up 1.6 percent, the same pace as for the year ending in January.
The report, along with figures on January housing starts also released Tuesday, were the last major economic data before the policymaking Federal Open Market Committee meets to consider changes to monetary policy.
Fed officials are expected to announce Wednesday that the economic recovery remains strong enough to continue reducing the central bank’s bond-buying stimulus program.
Critics of the Fed’s stimulus efforts have argued the flood of easy money would drive up prices. But inflation has remained in check since the financial crisis.