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A closely watched price index edged up 0.2% in February, suggesting that inflation remains low but is no longer slowing down.The Labor Department said "core" consumer prices, which exclude the volatile sectors of food and energy, rose 0.2% last month, the same as in January. In annual terms, the core rate increased to 1.2% for the 12 months ended in February, compared with annual increases of 1.1% registered in the three previous months.

The overall consumer-price index rose 0.3% in February, slowing down from a 0.5% rise in January, partly because energy costs increased at a slower pace. The increase in the core index was twice as large as economists had been expecting, but the rise in the overall index matched expectations precisely."Every key measure of inflation, in year-on-year terms, has been drifting down until now," said Mickey Levy, an economist with Bank of America in New York. "We think they're in the process of stabilizing now."

That is good news for policy makers at the U.S. central bank, who have spent the past year worrying about deflation. But further acceleration in core prices in the months ahead would stoke fears that inflation is back, and set the stage for higher interest rates later this year or early 2005. For now, economists say the Fed can afford to await further signs of the price trend and keep interest rates low in hopes of fostering continued economic growth.

Though the economy has rebounded strongly since mid-2003, it has produced only slight increases in jobs. Since August, employers have expanded their payrolls at an average rate of just 60,700 non farm jobs a month. That is less than half the amount necessary just to provide work for new entrants into the labor market.

Source: Wall Street Journal / US Labor Dept

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Total U.S. corporate profits before taxes surged 29% in the fourth quarter, tech Commerce Department reported in late March. The department also said gross domestic product, the nations's total output of goods and services, expanded at a 4.1% annual rate in the fourth quarter, a healthy pace that was in line with economists' expectations. Pretax corporate profits were up 18% for the year, compared with a 17% increase in 2002.