The Labor Department reported that its Consumer Price Index rose 0.2 percent last month, in line with expectations, but had slowed compared with its 0.5 percent jump in January. Capital goods, an indicator of investment activity, showed a sharp increase in output by 14.6 per cent in January 2018 as against a decline of 0.6 per cent a year ago.
The general index for the month of January 2018 stood at 132.3, thus registering a 7.5 percent growth as compared to January 2017. Food prices were unchanged, with the cost of food consumed at home dropping 0.2 percent.
Central Statistics Office (CSO) on Monday said that retail inflation has fell to a four-month low of 4.44 per cent and industrial production has zoomed by 7.5 per cent - a double delight that could ease pressure on RBI for increasing interest rates. The NFIB survey also showed almost a third of owners reported raising compensation to retain or attract workers last month, the largest share in more than 17 years. A second month of cooling consumer prices should act to counter the Reserve Bank of India's hawkish bias, staying its hand in April.More news: Jeff Goldblum to Appear in Jurassic World Evolution Video Game
"The eventual rabi harvest, distribution of the 2018 monsoon and the operationalization of the proposals made in the Union Budget for FY19, including the launch of Operation Greens and the augmentation of minimum support prices, would impact the trajectory of food inflation going forward", she added.
Excluding food and fuel prices, which can see big swings, the index also gained 0.2 per cent for the month, with noted gains in the prices for vehicle insurance, rent and apparel. The energy index increased slightly, with its component indexes mixed. "The 12-month change in the core CPI remained at 1.8% in February for the third consecutive month".
The core CPI was restrained by a moderation in rents.More news: Trump envisions space force someday in military
Within the February numbers, there were signs that price pressures were running hotter than they had been at this point in 2017. "While boosted by residual seasonality in January, this was nevertheless the highest three-month reading in a decade". Oil lately has trended in tandem with equities and remains under pressure from nagging concerns over rising US production.
Other areas did see price gains in February.
With a fall in vegetable prices and recent financial market developments, the report highlighted that a "Pandora's Box" has been opened for the RBI, awaiting its response.More news: Roma knock Shakhtar Donetsk out of Champions League on away goals
"Nonetheless it is still a useful gauge in establishing when and how the price pressures we've been seeing build up in U.S. supply chains start to filter down into the wider economy". This view supported prices for awhile but could not overcome lingering fears about rising US production.