February mortgage sales surge by 54 percent

US consumer prices rebounded in February as gasoline prices rose for the first time since June, and there were also signs of an uptick in underlying inflation pressures, which could keep a June interest rate increase on the table. Signs of inflation are likely to be welcomed by Federal Reserve officials.

They are also a good omen for an economy that has stumbled in recent months under the weight of a harsh winter, weak global demand, a strong dollar and the now-sett

US consumer prices rebounded in February as gasoline prices rose for the first time since June, and there were also signs of an uptick in underlying inflation pressures, which could keep a June interest rate increase on the table.

Signs of inflation are likely to be welcomed by Federal Reserve officials.

They are also a good omen for an economy that has stumbled in recent months under the weight of a harsh winter, weak global demand, a strong dollar and the now-settled labor dispute at one of the countryand#39s busiest ports. The Labor Department said on Tuesday its Consumer Price Index increased 02 percent last month after declining 07 percent in January.

That ended three straight months of declines in the index. In the 12 months through February, the CPI was unchanged after slipping 01 percent in January, as the impact of an earlier plunge in global crude oil prices lingers.

The dollar pared losses against a basket of currencies on the data, while US stock futures trimmed gains. Prices for US Treasury debt fell.

Fed officials have long viewed the energy-driven weakness in inflation as transitory. The US central bank, which has a 2 percent inflation target, has kept its short-term interest rate near zero since December 2008.

Fed Chair Janet Yellen said last week policymakers could raise interest rates when they had andquotseen further improvement in the labor marketandquot and were andquotreasonably confident that inflation will move back to its 2 percent objective over the medium termandquot The so-called core CPI, which strips out food and energy costs, increased 02 percent in February after a similar gain in January. In the 12 months through February, the core CPI rose 17 percent, the largest increase since November Economists say the Fed could tighten monetary policy even with the CPI running low as long the core CPI was not decelerating.

Crude oil prices fell 60 percent between June and January on fears of a global oil glut and the refusal of Saudi Arabia and other OPEC members to cut output. In February, Brent LCOc1 stabilized at around $60 and US crude at around $50.

SOURCE: Today’s Zaman