US consumer prices remain unchanged.

The core prices, (excluding food and energy) showed no change in February for the first time in 18 months, although consumer confidence is at a 16 year low.

Mickey Levy, chief economist at Bank of America Corp. in New York indicated that although positive one months stability is not a trend although he said that he did not expect the Fed to ease very aggressively because “it’s clearly a crisis situation in financial markets and a slumping economy.”

With grave concerns over inflation the fact that prices remained unchanged last month is little comfort especially as the cost of fuel has increased again this month.

Many economists are of the opinion that the Fed will reduce its benchmark rate by three-quarters of a point to 2.25 percent when policy makers meet on March 18.

Consumer prices were forecast to rise 0.3 percent, and the prices excluding food and energy were predicted to increase 0.2 percent so February was clearly a welcome sign.

In the last year the cost of living rose 4 percent, and the core rate has increased by 2.3 percent.

Potential declines in consumer prices could trigger companies to try and lure more custom with discounts, as demand wanes and growth stutters as a result.

Story link: US consumer prices remain unchanged.