The Labor Department earlier this morning released rather mixed data on consumer prices, one day after that same government agency issued metrics on the companion Producer Price Index. And, as was the case with the PPI report, the data were mixed.

Specifically, Labor noted that the headline Consumer Price Index, or CPI, gained an outsized 0.7% in February. An increase of 0.6% had been the consensus expectation. As was the case yesterday with the PPI, the precipitating factor in this surge of inflation was a jump in energy costs. In this instance, energy prices were up a staggering 5.4% last month. That was even higher than the PPI had seen with its gain of 3.0% last month.

If we back out the volatile energy and food components (and food costs were up a nominal 0.1% last month), to get the so-called core CPI, we find a much tamer increase of just 0.2%. Here, the latest rise was exactly in line with expectations. Of note, it is the core inflation reading that the Federal Reserve gives the greater weight to. Thus, the central bank's easy monetary policies would not now seem to be at risk.

As to other components in the aggregate mix, we saw prices for new cars off by 0.3% last month, while used cars and trucks saw an increase of 0.8%. Also, shelter and transportation costs were up by a scant 0.2% and 0.1%, respectively, while medical care services expenses rose by 0.3%. That has historically been a somewhat worrisome inflation metric, and this report on medical care costs must be seen as mildly unsettling. However, this number has stayed in a 0.1% to 0.3% band since last August. So unless there is acceleration from this point, medical care cost inflation would not seem to be a major problem.

On the whole, this was a modestly unsettling report, as the headline gain was the largest since June of 2009. Overall, the 12-month CPI increase was 2.0%, which is within the parameters set by the Federal Reserve, albeit just barely. It should be noted that the Federal Reserve's next policy meeting is set for March 19th and March 20th. We see little likelihood that the lead bank will adjust its monetary sights at that time.