Falling Shelter Costs Keep Consumer Inflation Tame

Washington, DC, March 18, 2010--Consumer prices in the U.S. were flat on a seasonally-adjusted basis in February, the Labor Department reported Thursday.

The flat reading on the consumer price index was exactly as expected by economists.

The core consumer price index -- which excludes food and energy prices -- rose 0.1%, also as expected by economists.

In the past year, the CPI has risen 2.1%. The core rate is up 1.3% in the past year, the smallest year-over-year increase in six years.

The CPI report shows very little inflationary pressure at the consumer level, giving the Federal Reserve the space to keep interest rates low.

Falling shelter costs have been the major factor keeping the CPI subdued. Shelter costs -- which account for more than 32% of the CPI -- have fallen 0.4% over the past year.