Annual inflation rose to 3.2 percent in February, hotter than expected

Consumer prices rose at a faster monthly and annual rate in February, according to inflation statistics released by the Labor Department on Tuesday.

The Consumer Price Index (CPI), which is closely watched as an indicator of inflation, rose at an annual rate of 3.2% in February and 0.4% last month. Consensus estimates show annual inflation slightly up from 3.1% in January, which economists had expected to hold steady.

The monthly inflation rate rose from 0.3 percentage points in January, but was in line with economists’ forecasts for February.

Gasoline and housing accounted for more than 60% of February’s monthly price increases, the Bureau of Labor Statistics said Tuesday.

The rise in inflation comes as President Biden ramps up efforts to combat high prices and reassure Americans on the economy in the run-up to the November election.

Biden, who is on track for a rematch with former President Trump, has struggled to sell his economic record to Americans. The U.S. economy enjoys ultra-low unemployment and strong wage growth, but years of stubborn inflation have eroded political support for Biden’s economic policies.

February’s inflation data could put the US Federal Reserve on track to keep interest rates on hold by the end of next week’s policy meeting. The Fed had expected several rate cuts in December, but the strength of the U.S. economy has put those plans on hold for now.

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