Ahead of the Bell: Consumer Price Index

Higher food and gas costs likely pushed up consumer prices in February, but outside those volatile categories inflation was probably tame.

Economists forecast that the Consumer Price Index rose by 0.4 percent in February, the same increase as the previous two months. Excluding the food and energy categories, however, the core index was expected to rise only 0.1 percent, according to a FactSet survey.

Consumer food prices rose 0.5 percent in January, and some economists expect a similar jump occurred last month. Food costs are likely to keep climbing for most of this year. The price of grains such as corn, wheat and soybeans has roughly doubled since last summer, due to bad harvests in many countries. The use of corn for ethanol has also contributed to the increase.

Wholesale food prices soared by 3.9 percent in February, the sharpest increase in more than 36 years, the Labor Department said Wednesday. The increase drove the Producer Price Index up by 1.6 percent last month, the biggest gain in nearly two years. The Producer Price Index tracks price changes before they reach the consumer.

Most of the gain in wholesale food prices stemmed from harsh winter weather that damaged vegetable crops in Florida, Texas and other southern states. Fresh vegetable prices jumped by nearly 50 percent in February.

Meat and dairy prices also rose. Higher costs for feed grains such as corn and soybeans can make beef, milk, pork and eggs more expensive.

The Federal Reserve on Tuesday acknowledged that food and oil prices have risen in recent months and said they are "currently putting upward pressure on inflation." But the central bank said the pressures are likely to be temporary. It also said that measures of "underlying inflation," a reference to core prices, "have been subdued."

That underscores a central challenge facing the Fed. It wants to reassure the U.S. public that it will prevent widespread inflation, but the central bank's focus on core prices isn't shared by many Americans, who see rising prices in supermarkets and at gas stations and worry that inflation could start to accelerate.

"The concept of core prices does not resonate with the public," said John Ryding, an economist at RDQ Economics.