Inflation Sees First Increase in Months, but Remains Slow

March 13, 2019

After remaining at the same level for three straight months, the consumer price index increased 0.2 percent in February. Despite the monthly increase, on a yearly basis, inflation actually slowed down. Consumers paid 1.5 percent more in February than a year before, down from January’s 1.6 percent increase. This is the slowest pace of inflation since September 2016, and a sharp decline from last summer, when inflation was at almost 3 percent.

The tame inflation, coupled with modest wage growth, means there will be more money in Americans’ pockets. Adjusted for inflation, hourly wages were up 1.9 percent year-over-year in February. Additionally, muted inflation means the fed will likely continue their “wait and see” attitude regarding further interest rate increases. Though the central bank uses a different measurement to track inflation, the underlying pressures impacting the CPI means they are unlikely to change their thinking anytime soon.

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