U.S. consumer prices rebounded in February as gasoline prices rose for the first time since June, and there were also signs of an uptick in underlying inflation pressures, which could keep a June interest rate increase on the table.
Signs of inflation are likely to be welcomed by Federal Reserve officials. They are also a good omen for an economy that has stumbled in recent months under the weight of a harsh winter, weak global demand, a strong dollar and the now-settled labor dispute at one of the country’s busiest ports.
The Labor Department said on Tuesday its Consumer Price Index increased 0.2 percent last month after declining 0.7 percent in January. That ended three straight months of declines in the index.
In the 12 months through February, the CPI was unchanged after slipping 0.1 percent in January, as the impact of an earlier plunge in global crude oil prices lingers.
The dollar pared losses against a basket of currencies on the data, while U.S. stock futures trimmed gains. Prices for U.S. Treasury debt fell.
Fed officials have long viewed the energy-driven weakness in inflation as transitory. The U.S. central bank, which has a 2 percent inflation target, has kept its short-term interest rate near zero since December 2008.
Fed Chair Janet Yellen said last week policymakers could raise interest rates when they had “seen further improvement in the labor market” and were “reasonably confident that inflation will move back to its 2 percent objective over the medium term.”