The Consumer Price Index, which tracks the costs of household goods and services, rose 0.2 per cent for the month, which matched analyst expectations but was down from January's sharp 0.5 per cent gain.
Economists had expected consumer prices to rise by 0.2 percent. Food Price Index part of CPI also declines from 4.7 to 3.3 percent.
Tame core goods prices (only 0.1% this month, and -0.5% yr/yr) continue to keep inflation at bay, a reflection of the remaining global economic slack offsetting a tightening USA economy. Focus now turns to USA consumer price data due later on Tuesday for the global markets to gauge inflation trends in the world's largest economy and as a guide for upcoming Federal Reserve policy. Volume is low as investors prepare for a week of major economic reports including consumer inflation, producer inflation, retail sales and building permits.
In men's, price increases of 4.3% in shirts and sweaters and 1.2% in trousers and shorts were partially offset by decreases of 0.8% in furnishings and 0.2% in the suits, sport coats and outerwear group.
The cumulative growth in the above mentioned three sectors during April-January 2017-18 over the corresponding period of 2016-17 has been 2.5%, 4.3% and 5.3% respectively.
Auto prices restrained inflation, as the cost of new vehicles fell 0.5% in February, the most since 2009, while used cars and trucks were down 0.3%, breaking a four-month streak of gains. It grew by 8.7 percent during the month as compared to 2.5 percent in January 2017, showing signs of recovery in the economy. It was at 5.07 percent in January. Sluggish pay increases have helped keep Inflation dormant for most of the past decade. The Nasdaq Composite Index was up 36.42 points, or 0.48 percent, to 7,624.74.
Food and beverages price inflation stood at 3.38%, while prices of pan, tobacco and intoxicants went up 7.34%.
The general index for the month of January 2018 stands at 132.3, which is 7.5 percent higher as compared to the level in the month of January 2017.
Avery Shenfeld, senior economist at CIBC World Markets, said that while headline inflation is expected to rise, he is not expecting to see the Federal Reserve to aggressively raise interest rates this year.
Capital goods also registered a healthy growth at 14.6 per cent in January, 2018 against a decline of 0.6 per cent a year ago.
Nevertheless, the recovery from the cash ban and the chaotic introduction of the consumption tax a year ago has been uneven.