US inflation tops forecasts for second consecutive month

Core inflation rose an annualised 4.2 per cent in the last three months, the fastest increase since June

US CPI increased 0.4 per cent between January and February. Picture: Getty

Underlying US inflation topped forecasts for a second month in February as prices jumped for used cars, air travel and clothes, reinforcing the Federal Reserve’s cautious approach to cutting interest rates.

The so-called core consumer price index, which excludes food and energy costs, increased 0.4 per cent from January, according to government data out Tuesday. From a year ago, it advanced 3.8 per cent.

Economists see the core gauge as a better indicator of underlying inflation than the overall CPI. That measure climbed 0.4 per cent from January and 3.2 per cent from a year ago, boosted by gasoline prices, Bureau of Labour Statistics figures showed.