Inflation Report Doesn't Pack Its Usual Punch

Inflation stayed put last month, the Labor Department said Wednesday, but as the Wall Street Journal observes, what everyone is really wondering is what comes next. With the onset of the war with Iran, "the February data is already completely inconsequential," RSM chief economist Joseph Brusuelas tells the paper.

But as for that February data: The AP reports consumer prices rose 2.4% compared with a year earlier, matching both January's 2.4% increase and economists' expectations. Excluding the volatile food and energy categories, core prices climbed 2.5% from a year ago, also matching January's level, which was the lowest in five years. Both figures are above the Federal Reserve's 2% target.

But Wednesday's data has been overtaken by the conflict that began Feb. 28, which has caused wild gyrations in oil prices as shipping lanes through the Persian Gulf have suffered a rare shutdown. Brusuelas estimates each $10 jump in the price of a barrel of oil translates into a roughly 0.2 percentage point increase to the Labor Department's inflation reading; oil ran an average of $65 a barrel in February, and has sat at an average of about $82 thus far in March.