The Department of Labor's (DOL) Consumer Price Index (CPI) dipped a seasonally adjusted 0.2% in February, thanks in large part to falling energy costs. During the last 12 months, prices have risen just 1%.

The drop in energy costs more than offset the rise in the price of food. If those two volatile categories are excluded, the so-called “core” rate of inflation last month was up 0.3%. For the last 12 months, however, it's up 2.3% -- the largest 12-month increase since May 2012.

Energy and food

Energy costs were down 6.0% in February -- the third straight decline, thanks to a plunge of 13.0% in the price of gasoline. Declines were also registered in fuel oil (-2.9%) and electricity (-0.2%). Natural gas (+1.0%) rose for the first time in six months.

The price of food rose 0.2% last month, with the food at home index category up for the first time since September. Major grocery store food group indexes were mixed. Posting gains were prices for fruits and vegetables (+0.8%), nonalcoholic beverages (+0.6%), and cereals and bakery products (+ 0.2%). Declines were registered in the cost of meats, poultry, fish, eggs, and other food at home (-0.1%), while prices for dairy and related products were unchanged.

Other items

Outside of energy and food, other increases came in shelter (+0.3), clothing (+1.6%), medical care (+0.5), new vehicles, used cars and trucks, alcoholic beverages, recreation, and tobacco (+0.2%). One of the few areas to post a decline was communications (-0.5%)

The complete report is available on the DOL website.

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