990367 Meat Prices Push Consumer Prices Up in February

Washington - Consumer prices barely budged last month, rising just 0.1% despite a few scattered trouble spots such as meat, oranges and airline fares.

February marked the third consecutive monthly rise of that tiny magnitude in the Consumer Price Index, the Labor Department said. And it left the seasonally adjusted inflation rate for the first two months of the year at just 1.1%, compared with a 12-year low of 1.6% for all of 1998.

The report confirms anecdotal evidence, released Wednesday in the Federal Reserve's “beige book” survey of regional economic conditions, showing “prices of most goods remained little changed” so far this year.

And it means monetary policy-makers probably will feel comfortable leaving short-term interest rates unchanged when they meet next on March 30.

Energy costs last month were unchanged, with declines of 1.4% for fuel oil and 0.5% for gasoline offsetting increases of 0.6% for electricity and 0.1% for natural gas. Energy has fallen or held steady during five of the past seven months.

Food prices, meanwhile, rose only 0.1% after a substantial 0.5% increase in January. Fruit costs were up 0.6% with oranges jumping 5.3% on top of a 24.1% gain in January. Thanks largely to a December freeze in California's Central Valley, oranges were 48% more expensive than a year earlier. Beef rose 1.3%, the most in six years, and pork, 1.4%.

Still, pork remained 5.3% cheaper than a year ago and vegetable costs fell 3.4%, with tomato prices tumbling 20%, the most in almost three years.

Prices excluding the volatile food and energy components edged up 0.1% in February. Airline fares jumped 2.4%, hospital services rose 0.5% and textbook and school supplies, 1.2%.

However, two categories heavily influenced by competition from imports -- clothing and cars -- fell, 0.2% and 0.3%, respectively. Computer prices declined 2.8% and were 34.6% lower than a year ago.

Also, tobacco costs declined 1.4% but were still 33.5% higher than a year earlier, reflecting tobacco companies' efforts to recoup the cost of multimillion-dollar liability settlements.

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