Inflation held steady in February, as higher prices threatened by war in Iran

(ASSOCIATED PRESS) — Inflation remained stubbornly elevated last month as gas prices rose, but it’s a snapshot of consumer prices before a U.S.-Israeli attack on Iran sent energy costs soaring.

Consumer prices rose 2.4% in February compared with a year earlier, the Labor Department said Wednesday, matching January’s increase. Excluding the volatile food and energy, core prices climbed 2.5% from a year ago, also matching January’s level, which was the lowest in five years. Both remain above the Federal Reserve’s 2% target.

Wednesday’s data has been overtaken by a conflict that began when the U.S. and Israel attacked Iran on Feb. 28, causing wild gyrations in oil prices as shipping lanes through the Persian Gulf suffered a rare shutdown. Gas prices have jumped sharply and are expected to fuel higher costs broadly. Inflation data for this month will be released in early April.

The price spike will challenge the inflation-fighters at the Federal Reserve and could slow consumer spending, which drives two-thirds of the nation’s economic growth.

Prices could retreat if the war ends soon, as President Donald Trump has hinted. But rising oil prices threaten to worsen inflation for at least a few months with Americans already worn down by nearly five years of sharply higher costs. “Affordability” has become a thorny political issue for congressional Republicans with midterm elections later this year.

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