U.S. consumer prices increased moderately in February as higher shelter costs were partially offset by cheaper airline fares, giving the Federal Reserve room to keep interest rates unchanged next week while monitoring the economic impact of a trade war.

U.S. wholesale inflation decelerated last month, suggesting that price pressures are easing for now. The Labor Department reported Thursday that its producer price index — which tracks inflation before it reaches consumers — was unchanged from January after rising 0.

U.S. Consumer prices rose less than expected in February, with the consumer price index (CPI) rising 0.2% month-on-month and 2.8% on an annual basis. According to a CNBC report, economists surveyed by Dow Jones expected headline CPI to come in at 0.

February inflation measured by the Consumer Price Index Wednesday was 2.8% annually and was up a lower than expected 0.2% for the month, seasonally adjusted.

The much-awaited inflation data of United States (US) signals cooling in headline Consumer Price Index (CPI) standing at 2.8 per cent year-on-year from 3 per cent in January, as per the official data released by US Bureau of Labor Statistics.

Monthly growth and core inflation data also came in lower than expected, but this will not affect the Federal Reserve’s March decision US consumer price inflation data for February came in slightly below expectations across the board.

The Labor Department released the consumer price index for February which found inflation was 2.8%, in line with economists' expectations ahead of the next Federal Reserve meeting.