Inflation Perks Up as U.S. Economy Starts Overcoming Weather



Bloomberg News

Inflation showed signs of stirring in February, signaling an improving U.S. economy is starting to give companies the ability to charge more.
The consumer-price index rose 0.2 percent, the first gain in four months, a Labor Department report showed Tuesday in Washington. Core costs, which exclude food and energy, also increased 0.2 percent, exceeding the median forecast of economists surveyed by Bloomberg and reflecting broad-based advances in rents, new and used autos, clothing and air fares.
Prices should “see further stabilization this year as we expect overall growth to firm from what’s going to be a lackluster pace in the first quarter,” said Sam Bullard, a senior economist at Wells Fargo Securities LLC in Charlotte, North Carolina, which is the top forecaster of core inflation. “Once we get into the second half of this year and into 2016, it’s not going to take much effort to get headline inflation toward 2 percent.”

 That would match the target set by Federal Reserve officials, who last week said they needed to be convinced inflation would eventually accelerate before raising interest rates. Other reports Tuesday showed home sales unexpectedly climbed in February and manufacturing picked up in March as the effects of harsh winter weather and the work slowdown at West Coast ports dissipated.
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