FX.co ★ U.S. Annual Consumer Price Growth Ticks Up To 2.5% In February

In a much-anticipated report by the Commerce Department, it was revealed that consumer prices in the United States had risen by a slightly less than expected 0.3% in February, as compared to the prior month's upwardly revised 0.4%.

A team of economists had predicted an advance of 0.4%, against the originally reported 0.3% increase for the preceding month. Meanwhile, the annual rate of consumer price growth rose to 2.5% in February from January's 2.4%, aligning with expert projections.

Upon exclusion of food and energy prices, core consumer prices, too, exhibited a 0.3% rise in February, after an upward revision to 0.5% in January. This increment was exactly as predicted.

The yearly growth rate of core consumer price growth decelerated to 2.8% in February from an upwardly revised 2.9% in January. Economists had estimated core price growth to remain consistent with the previously reported 2.8%.

These critical inflation readings, which are believed to be the Federal Reserve's preferred measures, were incorporated in the Commerce Department's report on February's personal income and spending.

The report showed a 0.3% increase in personal income for February, following a 1.0% surge in January. Economists had forecasted a 0.4% rise.

Disposable personal income (personal income after deducting current personal taxes) showed a marginal 0.2% rise in February, following a 0.4% increase in the previous month.

Additionally, personal spending in February rose by 0.8%, improving from a mere 0.2% increase in January. This was much higher than the 0.5% expected by economists.

Factor out price changes and personal spending grew by a further 0.4% in February, reversing from a 0.2% decrease the month before.

But this significant jump in spending over income led to a drop in personal savings as a percentage of disposable personal income from 4.1% in January to 3.6% in February.