Food Price Index part of CPI also declines from 4.7 to 3.3 percent.
Consumer food prices rose 3.26 per cent in February, compared with 4.70 per cent in January, as prices of pulses fell more than 17 per cent from a year earlier.
Prices for women's and girls' apparel increased 1.5% in February, while men's and boys' clothing prices were up 1.7%. Trader's await this week's inflation numbers, following Friday's softer than expected wage data which showed a decline from January. Even better, these growing throng of employed Americans - which suggests increased consumer spending and by extension, stronger growth - has yet to put pressure on wages and again, by extension, inflation.
The CPI inflation for rural areas was 4.37% in February while for urban areas it was 4.52%. It is expected to show an increase of 0.2%, well below last month's 0.5% increase. The uptick in core prices also matched expectations. Consumer non-durables grew at 10.5 per cent as against a growth of 9.6 per cent. Consumer durable goods recorded a growth rate of 8 per cent in January 2018 against a contraction of 2 per cent a year ago. But the Fed's preferred inflation gauge has been nearly entirely below that target for the past six years. While not the Federal Reserve's preferred inflation measure, the data shows that price pressures are slowly moving towards the central bank's 2% target. Prices for new motor vehicles fell 0.5 percent, the biggest drop since August 2009, after slipping 0.1 percent in January.
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.
While the consumer price index is a popular barometer of economic health, it is not the primary gauge the Fed uses to determine whether it is meeting its mandate of price stability.
Still, there were plenty of signs in the jobs report that inflation may remain tame.
It still is the best of times for the United States economy for in spite of President Donald Trump's micro-management the S&P 500 index remains 3.4% in the green so far this year and 10-year bond yields have fallen from the 2.94% high recorded in late February to 2.84% overnight.
Note that in 2013, 2016 and 2017 a core rate of 0.3% was reported for January - without inflation increasing on a sustainable basis. Transport and communication gained in inflation of 2.39%. It was at 5.07 percent in January. They previously were on the sidelines, neither working nor looking for work.