Consumer prices moderated last month

Associated Press

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WASHINGTON -- Consumer inflation, which had been pushing relentlessly higher, posted its mildest reading in six months in February as the costs of energy and food moderated. The relief was expected to be short-lived, given that energy prices have resumed their upward climb.

AP

The price of cereal and bakery products shot up by 1.8 percent.

The Labor Department reported Friday that consumer prices were unchanged last month, a much better performance than the 0.3 percent gain that had been expected.

Core inflation, which excludes energy and food, was also well-behaved, with an unchanged reading in February following a worrisome 0.3 percent jump in January.

The better-than-expected February inflation reading will likely be reversed in coming months, considering the big surge in energy prices in recent weeks. Crude oil hit a record high this week above $110 per barrel and gasoline pump prices jumped to a national record of $3.28.

But for February, energy prices posted a 0.5 percent decline with gasoline prices falling by 2 percent, the biggest drop since last August.

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