The U.S. Labor Department this morning reported that the Consumer Price Index (CPI) for February rose 0.7%, led by a 9.1% spike in gasoline prices. CPI is up 2% over the past 12 months.

The spike in gasoline prices boosted the overall energy index, which includes natural gas and electricity prices, by 5.4%. Food costs rose 0.1% in February on a sharp rise in the costs of fruits and vegetables.

Excluding food and energy, core CPI rose 0.2% in February and the 12-month rise in core CPI also totaled 2%.

The consensus estimates called for a rise of 0.5% in CPI and a rise of 0.2% in core CPI.

Hourly earnings fell by 0.6% as the average increase in earnings rose just 0.2%, far short of the overall 0.7% rise in the index.

Gasoline prices have moderated in March, which is likely to lead to a reversal of at least some of the rise in energy prices. Natural gas prices have risen this month, but probably not by enough to affect seriously the overall index.

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