The Labor Department reported on Friday that consumer prices rose in February by the fastest rate since 2009. Last month, the consumer price index grew by 0.7 percent. That's up from zero-percent price growth in both January and December.
However, it's not time to worry about out-of-control inflation just yet. The uptick was driven in large part by gas prices, which grew by more than 9 percent from January to February. Excluding energy and food prices, which tend to be volatile, the so-called "core CPI" grew by a much more tame 0.2 percent.
Because of the large contribution from higher gas prices—which everyone can see as they pass the gas station—the bump in the CPI did not startle economists.
"The sizeable increase in CPI inflation was not surprising, given the sharp uptick of prices at the pump, which peaked towards the end of February," writes Michael Dolega, economist at TD Economics, in a commentary on the data this morning. He adds that the spikes are not here to stay.
"With gasoline prices moderating into the first half of March, next month's report should see a correction due to the volatile energy component," he adds. Translation: when gas prices level off, so will the broader measure of price growth.
Lower price inflation appears likely in subsequent months as well, says another economist. "The consumer price outlook looks relatively modest," writes Chris Christopher, director of consumer economics at IHS Global Insight, in a commentary this morning. "Pump prices are expected to fall and food price increases seem well under control."
He adds that these lower prices should help American workers to deal with their smaller paychecks due to the end of the payroll tax cut.
In addition, there is another nugget of good news in the report: low food price inflation. Food prices grew by only 0.1 percent last month and were only up by 1.6 percent over the prior year. Last summer's drought had sparked fears of higher food prices in early 2013. Thus far, those higher prices at supermarkets and restaurants do not seem to have materialized.