US Inflation 3.2% YOY in February, Slightly Above Expectations

US consumer prices rose 0.4% in February, slightly above analysts’ expectations. This was reported by the US Department of Labor on Tuesday, March 12, recalling that growth was 0.3% in January. The core index, that is, excluding food and energy prices, also rose 0.4%, while a 0.3% increase was expected.

On a year-over-year basis, the figure is up 3.2% from the same period last year, but higher than +3.1% recorded in January. The annualized baseline was up 3.8%. Energy prices were up 2.3% from last month but down 1.9% on a year-over-year basis. Food prices remained more or less stable, rising by 0.4% in January, but by 3.2% YOY. Average weekly earnings were unchanged from January.

US inflation data has been the focus of global markets. Higher-than-expected inflation seems to indicate that the Federal Reserve will not cut interest rates neither at its March 19-20 meeting, nor at its meeting scheduled for April 30 – May 1.

Most Asian markets closed higher on Tuesday, March 12, led by technology stocks. Stock futures from Europe and the US also rose.

Vasu Menon, managing director of investment strategy at OCBC Bank in Singapore, told reporters that “the better-than-expected performance may worry investors, even if only in the short term.”

“Markets have come to realize,” Menon said, “that the future trajectory of US inflation will be unstable and that better-than-expected figures in a month or two may not change the medium-term inflation outlook, which is in a broad downtrend.”