US inflation slightly above forecasts

Friday, 16 March 2007 15:04

US government figures show that US consumer prices rose by 0.4% in February, slightly above market expectations of 0.3%.

But the Labor Department said the 'core' index, which excludes volatile food and energy costs, was up a more modest 0.2%, in line with market forecasts.

Over the past 12 months, consumer prices have risen 2.4% and the core index is up 2.7%.

Fed officials have said they expect inflation to moderate later in the year but have indicated they stand ready to act by pushing interest rates higher if necessary to tamp down cost pressures.

Meanwhile, US industrial production rebounded by a much stronger-than-expected 1% in February after falling in January, the US central bank said today.

Most economists had been expecting the Federal Reserve's monthly snapshot industrial sector, measuring the output of US factories, mines and utilities, to show a rise of just 0.3%.

The spike in industrial output across the US, the strongest gain since November 2005, was largely attributed to a big jump in gas and electricity output from the nation's utilities amid cold winter temperatures.

Production at utilities, including gas and power plants, surged 6.7%, while manufacturing production rose 0.4% and output from mines gained 0.1%.