Consumer Price Index Subdued

Last week's average hourly earnings did in fact set the pace for February's inflation readings, and the word is subdued. The CPI and the core CPI both managed only 0.2 percent increases as was expected with the year-on-year rates at 2.2 percent overall, which was also expected, but at only 1.8 percent for the core which is 1 tenth under Econoday's consensus.

A give back in transportation costs held down prices in February with the component unchanged following a strong gain in January. New vehicle prices fell 0.5 percent in the month with used car prices down 0.3 percent, both echoing flat consumer demand for vehicles. Communication costs were also weak with wireless telephone services, which began to jump about this time last year, down 0.5 percent in the month. Medical care fell 0.1 percent in the month with recreation flat.

Showing price strength for a second month is apparel led in February by men's apparel and especially apparel for boys. Housing rose 0.3 percent in the month though the closely watched owners' equivalent rent subcomponent gained only 0.2 percent.

Prices are not risking extra vigilance from the Federal Reserve. Until wages get moving, overall inflation may very well continue to run flat with only the slightest hint of upward pitch.