Government Says Consumer Prices Rose Slightly in February

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We have also noted price increases across some major food items during our food survey in the month.

However, the factoring in of additional data showed the gain in hourly wages gains was illusory and the reported gains were overstated. It had increased its inflation projection to 4.3-4.7% in H2FY18 as compared to its earlier projections of 4.2-4.6%. It grew by 8.7 per cent during the month as compared to 2.5 per cent in January 2017, showing signs of recovery in the economy. The three-month annualized change rose to 3.1% in February. The highlighted 2 percent level is the Federal Reserve's Core inflation target for the CPI's cousin index, the BEA's Personal Consumption Expenditures (PCE) price index.

The latest U.S. employment report showed that average weekly earnings slowed to 2.6% in the year to February, down from 2.8% in the previous month, which was revised lower from the initial estimate of 2.9% - the one that sparked speculations that the Fed could go four or more this year instead of the forward guided three interest rate hikes. But the Fed's preferred inflation gauge has been nearly entirely below that target for the past six years.

Inflation in India slowed for a second straight month, giving the central bank room to keep interest rates on hold for longer while providing relief to battered bond investors.

Yet prices are falling for new and used cars.

"The broader story remains that of USA monetary policy normalization in the backdrop of an improving economy and a further decline in currency market volatility would only fuel more risk taking appetite", said Commerzbank's FX strategist Thu Lan Nguyen.

Next week, the Fed is widely expected to raise short-term interest rates for the sixth time since late 2015, when it started lifting rates from almost zero.

The RBI expects growth to pick up in the next financial year.

The competitive environment facing Kroger from Walmart and Amazon.com (AMZN) via its Whole Foods division, among others, offers at least some reason to doubt whether wage pressure will feed through to higher prices. CPI will be released on Tuesday could be the most important statistic of the week since it's crucial to the FOMC's rate trajectory. The indexes for shelter, apparel and motor vehicle insurance all rose and contributed to the monthly increase. Price increases have largely remained below that goal in recent years. Economists polled by Bloomberg News had expected an annual reading of 4.7 percent. They previously were on the sidelines, neither working nor looking for work.

The interplay among factors will therefore determine the pressures on inflation.

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