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February price index creeps up .1 percent

That brought the annual inflation rate for the 12 months ended in February to 2.4 percent, down slightly from the 2.6 percent inflation rate for the 12 months ended in January.

Department said yesterday.

That brought the annual inflation rate for the 12 months ended in February to 2.4 percent, down slightly from the 2.6 percent inflation rate for the 12 months ended in January.

Food and transportation prices went up the most, by 0.3 percent.

Fresh vegetable prices spurred the rise in the food index, with the prices of celery and green pepper rising more than 11 percent.

In transportation, car fuel and cycle fuel prices rose by 1.5 percent and 1.4 percent respectively.

Prices in the fuel and power sector actually dropped 0.9 percent in February, the Statistics Department said. The price of electricity dropped 1.2 percent due to a 13 percent decrease in the fuel adjustment clause, while propane prices rose by 3.5 percent.

In other sectors, rent, health and personal care, and household goods, services and supplies all rose 0.1 percent, while there were no changes in clothing and shoes, tobacco and liquor, or education, recreation, and reading.

February was the first month in which changes were calculated using data from the 1993 Household Expenditure Survey, replacing data from the 1982 survey.

Also, the time base was changed to make January 1995 equal 100.0 on the index.

Previously, January 1985 equalled 100.0.

The 0.1 percent increase in February brought the index to 100.1.

The CPI measures the average change in prices over time for a fixed "basket'' of goods and services. But since the purchasing patterns of households change over time, the CPI must be updated periodically.

The CPI is classified into nine major expenditure components, with dollar spending on each of the nine items relative to total household spending determining the "weight'' each item will be given in calculating the CPI.

The department noted the relative importance of food in the basket had dropped steadily since 1974, a pattern common to major developed countries like the United States, Canada, and the United Kingdom.

The decline in the relative importance of food was linked to a rise in real income and did not mean less money was being spent on food, the department said.

Instead, "the relative importance of food in the index has been overshadowed by the relative increased importance assumed by other expenditure items such as rent, household goods, services and supplies, and health and personal care.''