Impact: February U.S. Consumer Prices up on higher gas costs image

Consumer prices rose index rose 0.4 per cent in February as the cost of gasoline spiked, a government report showed on Friday.

The biggest jump in gasoline in more than a year accounted for about 80 percent of the increase in prices last month, leaving households with less money to spend on other goods and services.

Indexes for shelter, new vehicles, medical care, and household furnishings and operations all advanced, while indexes for apparel, recreation, used cars and trucks, and tobacco all declined.

The average price for a gallon of petrol on Friday was $US3.83, according to AAA. That’s US32 cents higher than a month ago. The gasoline index rose 6.0 percent, its largest increase since December 2010. The gasoline increase more than offset a decline in the index for household energy, which fell 0.6 percent.

Federal Reserve policy makers say the advance in fuel costs will be temporary, and most see little risk inflation will flare out of control as unemployment exceeds 8 percent.

Separately, the Federal Reserve said Friday that factory output rose modestly in February after biggest two-month rise since 1998.