U.S. Economy Strengthening

Federal Reserve

CBJ — The American economy continues to show signs of expansion thanks in large part to the fact that U.S. inflation increased more than expected in February, notably as rents and medical costs maintained their upward trend, which could keep the Federal Reserve on course to gradually raise interest rates this year.

Other data showed the housing market continuing to strengthen last month and manufacturing stabilizing. While the Fed stands pat at its policy meeting, stirring inflation, a steady housing sector and tightening labor market conditions have raised the probability of a rate hike in June.

The U.S. Labor Department said its Consumer Price Index, excluding the volatile food and energy components, rose 0.3% last month after a similar gain in January.

That lifted the so-called core CPI 2.3% in the 12 months through February, the largest increase since May 2012, after it advanced 2.2 percent in January.

The Fed has a 2% inflation target and monitors a price measure that has also pushed higher in recent months. The U.S. central bank raised its benchmark overnight interest rate in December for the first time in nearly a decade.



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