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CPI, Housing Starts Data Are Bullish

Both headline and core CPI are up 0.1% in February.
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Consumer-level inflation was tame last month, the government said Thursday, adding a dovish note to the interest rate debate.

The consumer price index rose 0.1% in February, after jumping 0.7% a month earlier. Excluding food and energy, the so-called "core" CPI was also up 0.1%, according to the Commerce Department.

Economists had been expecting readings of up 0.1% on the headline number and up 0.2% on the core.

Contributing to the benign reading was a 1.2% decline in energy prices and a 0.1% rise in both vehicle costs and housing.

Thursday's number bolsters the view of observers who expect the

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Federal Reserve

to stop laying on interest rate hikes after one or two more meetings of the Federal Open Market Committee. The official fed funds lever currently stands at 4.5% after 14 consecutive quarter-point tightenings.

A separate report released Thursday showed housing starts occurred at an annualized rate of 2.12 million in February, down 7.9% from a revised January number. Economists had expected a rate of 2 million starts in February. Building permits fell 3.2% to 2.145 million, also slightly better than expected.

Stock futures turned around after the reports, with the

S&P 500

going from 2 points below fair value to 3 points above.