Midwest consumer prices tick upwards in February

The Midwest consumer price index in February rose 0.6% from the month prior, according to a U.S. Bureau of Labor Statistics report released this morning.

On a 12-month basis, February prices measured in the index were 2.8% higher for urban consumers in the 12-state Midwest region, mostly attributed to rising costs for shelter and food when dining out.

The index measures price changes for goods and services, including energy, food, clothing, shelter and health care, compared with a base period of 1982-84. A market basket of goods and services that cost $100 at that time cost $286.35 last month in the region.

The February increase was led by 4% higher energy costs, including an 8% spike in gasoline. However, both energy and gasoline prices are down for the 12-month period, according to a BLS news release. Data in the report are not seasonally adjusted.

In response to the latest pricing index, National Association of Realtors Chief Economist Lawrence Yun issued a statement weighing in on expected action by the Federal Reserve:

“The latest data does not fundamentally change what the Fed will likely do – three rate cuts this year,” Yun said, predicting another two to five cuts by the end of next year to help lower mortgage rates. “The one big limiting factor is the large budget deficit. More government borrowing will mean fewer funds are available for mortgage borrowing. There is a good possibility that mortgage rates will head toward 6%, but they will be hard-pressed to go down further.”