According to the BLS, the CPI increased by 0.2% in February on a seasonally adjusted basis. This is the first increase after a consecutive decline in the last three months. The index was unchanged over the last twelve months. Hence, the ups and downs in the last twelve months have evened out, so that we are at the same price level again that we had in February 2014.
Generally, the increase in the price level last month can be attributed to the sudden increase in gas prices. After a series of declines, the index for gasoline rose for the first time since July. The change from December to January was -18.7%, while the change from January to February was +2.4 percent.
The food index also increased by 0.1 percent. However, the results for the past month were mixed. Even though in increased on average, three of six major grocery store group indices declined, while the other three increased.
In the table below you can find the percentage of popular items in the last twelve months. If you compare the table to the same table from last month, you will notice that the growth in price is broad-based.
The BLS released yet another positive jobs report this morning. Nonfarm payroll employment increased by 295,000 jobs in February and the unemployment rate dropped to just 5.5% - the lowest level since May 2008.
The question going forward is now: how close are we to the natural rate of unemployment? Many economists believe this is around 5.5 percent.