Inflation remains steady; gas a concern

Inflation remained low in February, the federal government said Friday, but surging gasoline prices are raising concerns about the future.

The Labor Department said its Consumer Price Index, a closely-watched measure of the cost of living, rose by 0.4 percent in February from January, both nationally and in the New York-Northern New Jersey-Long Island area.

Acting Regional Labor Commissioner Joyce A. Sweeney said the rise primarily reflected higher prices for gasoline and a few other items, including recreation.

Lower inflation leaves more money in consumers' pockets, boosting their buying power and supporting economic growth.

For the 12 months ended in February, prices of services and a basket of goods rose an average of 2.6 percent in this region, again with major increases in gasoline and gains also in food and medical care. Nationally, the increase was 2.9 percent.

The national consumer price index increase of 0.4 percent from January to February was the largest increase in 10 months, also led by a 6 percent increase in gasoline costs.

Economist Pearl Kamer of the Long Island Association, a business group, said rising oil and gasoline prices seem likely in coming months to ripple through the economy, raising the costs of everything made with petroleum or shipped by petroleum-powered methods. "We haven't seen it as yet but it's coming," she said.

That would push up the inflation rate and could force the Federal Reserve to consider raising interest rates, to curb inflation, she said.

In the housing category, the regional numbers show rents increased by 2.5 percent in the year that ended in February, a sign, said Kamer, that apartments are in short supply as would-be home buyers wait for prices to bottom, view homes as an undesirable investment or are unable to qualify for mortgages.With AP