Fuel and light inflation stood at 6.8 per cent, compared with 7.58 per cent in January, while housing inflation stood at 8.28 per cent, from 8.33 per cent the previous month.
The Index of Industrial Production (IIP) had grown at 7.1 per cent in December 2017.The growth was driven by the manufacturing sector which grew by 8.7 per cent during the month as compared to 2.5 per cent in January 2017, showing signs of recovery.
Tuesday, the U.S. Labor Department said its U.S. Consumer Price Index rose 0.2% in February, after increasing 0.5% in January. That's in line with policy makers' outlook for price gains steadily approaching their goal and officials' projection for three interest-rate hikes this year, including one anticipated at the Fed's meeting next week. A larger harvest from the winter crop is expected by end-March and in April, and this is likely to further cool vegetable price inflation. While not the Federal Reserve's preferred inflation measure, the data shows that price pressures are slowly moving towards the central bank's 2% target.
The indices of industrial production for mining, manufacturing and electricity sectors for the month of January 2018 stands at 114.5, 133.8 and 149.5 respectively, with the corresponding growth rates of 0.1 percent, 8.7 percent and 7.6 percent as compared to January 2017.
The cumulative IIP growth for the April-January period of the current fiscal, at 4.1 per cent, was lower than the 5 per cent posted in same period of 2016-17.
Former Fed Chairwoman Yellen had recently expressed her concern that inflation was stalled due to the Fed hiking rates too quickly.
The Consumer Price Index, which tracks the costs of household goods and services, rose 0.2 per cent for the month, which matched analyst expectations but was down from January's sharp 0.5 per cent gain. It is set to increase by just 0.2% for both headline and core, which should keep the core year over year pace unchanged at 1.8%. The NFIB survey also showed almost a third of owners reported raising compensation to retain or attract workers last month, the largest share in more than 17 years. It is expected to show an increase of 0.2%, well below last month's 0.5% increase. "Some uptick can happen, however, we do not see the risk of inflation going beyond 6 percent".
"The broader story remains that of USA monetary policy normalization in the backdrop of an improving economy and a further decline in currency market volatility would only fuel more risk taking appetite", said Commerzbank's FX strategist Thu Lan Nguyen.
Tame core goods prices (only 0.1% this month, and -0.5% yr/yr) continue to keep inflation at bay, a reflection of the remaining global economic slack offsetting a tightening United States economy.