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Food, Energy Push Consumer Prices by Most in 2 Years

Thursday, 17 Mar 2011 08:37 AM

 

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Americans paid more for food and gas in February, as consumer prices rose at the fastest pace in nearly two years. But outside those volatile categories, inflation was tame.

The Consumer Price Index rose 0.5 percent in February, the largest increase since June 2009, the Labor Department said Thursday. Core prices, which exclude food and energy, rose only 0.2 percent, matching January's gain.

Gas prices jumped 4.7 percent in February, above January's increase but below December's rise. Oil and gas prices have risen sharply since the beginning of the year due to political turmoil in the Middle East.

Food costs increased 0.6 percent, the most since September 2008. Food costs rose for almost all major grocery store groups, including meat and eggs, dairy and fruits and vegetables. The cost of cereals and baked goods was flat, the only group that didn't increase.

Prices for many agricultural commodities, including corn, wheat and soybeans, have doubled since last summer due to bad weather around the globe. Those higher prices are now showing up on store shelves. Vegetable prices also soared last month due to harsh winter freezes in southern U.S. states.

More food and gas price increases are in the pipeline. The Labor Department said Wednesday that wholesale prices jumped 1.6 percent in February, the largest increase since June 2009. Wholesale food prices rose 3.9 percent, the biggest increase since November 1974.

Prices for other goods and services are recovering from very low levels. Core consumer prices increased 1.1 percent in the past year, up from a 0.6 percent annual increase in October. Still, that's below the Fed's preferred range of 1.5 percent to 2 percent.

The Federal Reserve said this week that more expensive food and energy is "currently putting upward pressure on inflation." But the central bank said the pressures are likely to be temporary. It also said that measures of underlying inflation have been subdued, a reference to core prices.

© Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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