By Jeffry Bartash, MarketWatch –
WASHINGTON — The cost of living in February rose by the fastest amount in 10 months as Americans paid sharply higher prices for gasoline, according to the latest government data.
The consumer price index jumped 0.4 percent last month on a seasonally adjusted basis, the Labor Department said Friday. That was slightly below the 0.5 percent increase forecast by a MarketWatch survey of economists.
The increase stemmed mostly from 6 percent spike in the price of gasoline — the biggest jump since December 2010. That accounted for about four-fifths of the increase in the overall CPI.
Yet the price of natural gas declined again, keeping energy costs partly in check. Overall, energy prices climbed 3.2 percent, the biggest increase in nearly a year.
Excluding food and energy, the so-called core rate of inflation rose a smaller 0.1 percent. Core CPI is viewed by the Federal Reserve as a better indicator of long-term inflationary trends because food and energy costs can jump sharply from month to month.
Economists expected a 0.2 percent increase in the core rate.
The higher price of gas has suddenly emerged as a key issue in the 2012 presidential election. Republicans have slammed President Barack Obama’s policies as contributing to the rise in oil prices, prompting the White House to accuse them of political opportunism.
The cost of energy — for homes and autos — eats up a good portion of consumer income and sharp spikes can cause the economy to slow. Yet it’s unclear how much prices will rise or for how long.
If gas prices don’t rise any further, the U.S. is unlikely to suffer much, economists say. Yet another big surge could squeeze the budgets of Americans and hurt the U.S. economy just like it did last spring.
The cost of food, meanwhile, was unchanged in February. Prices rose for housing, autos and household furnishings.
The cost of shelter rose for the fifth straight month and the index for new autos posted the first increase since last June, up 0.6 percent.
Yet prices dropped 0.9 percent for clothing, the biggest decline in six years.
In the past 12 months, consumer prices have risen an unadjusted 2.9 percent, unchanged from January.
The core rate has increased 2.2 percent in the past 12 months, down from 2.3 percent in January.