U.S. Inflation Rose 0.1% In February; Now Up 2.7% Over 12 Months

Summary

  • The 12-month increase of 2.7% was the largest since March 2012.
  • Gasoline prices fell in February, moderating overall inflation. But they’re still up 30.7% over the last year.
  • Non-seasonally adjusted inflation rose 0.31%, which will boost the principal balances of TIPS in April. One month is left in the I Bond rate-setting period.

Read my full analysis on SeekingAlpha.com

Also, I have updated my Inflation and I Bonds page with these new numbers.

And here are the new TIPS inflation indexes for April.

 

 

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2 Responses to U.S. Inflation Rose 0.1% In February; Now Up 2.7% Over 12 Months

  1. george green says:

    ?- what does “index ratio” mean. signify?

    George E Green

    ________________________________

    • tipswatch says:

      CPI-U is stated as a ratio to inflation in 1982-4, which was set at 100 then. In February that rose to 243.603. When a new TIPS is issued, it gets an inflation ratio around 1.000 and then that number rises (or falls) with each month’s inflation. Here is the chart of April inflation indexes:

      https://www.treasurydirect.gov/instit/annceresult/tipscpi/2017/CPI_20170315.pdf

      You can look at each non-matured TIPS and see where its inflation begins the month and ends the month in April. That index is multiplied by the par value to determine the TIPS current value. So a TIPS with a par value of $10,000 and an inflation index of 1.17525 would have a current value of $11,752.50. You can use these indexes in an Excel spreadsheet to calculate your current values.

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