By Anna Roberts

Consumer prices dipped in February– largely due to dwindling gas prices– however important elements like housing costs and medical expenses rose healthily last month, indicating that inflation could still be on the rise.

Figures went down this month by 0.2 percent, compared to January, when the rate had held steady at zero since December. It’s been slow going, but pressure has been building and inflation looks to be on the rise overall.

The report, released by the Bureau of Labor Statistics on Mar. 16, tracks everything American consumers buy, from car payments to a new pair of shoes. Core prices, without the unpredictable costs of food and energy, rose 2.3 percent in the last 12 months, which is the biggest increase since May 2012.

Percent Change Month to Month

Consumer Price Index: Core v. All Items Index, Percent Change Month to Month

“The real story of this report will be the evident firming in underlying inflation momentum,” wrote Millan Mulraine, Deputy Head of US Research and Strategy at TD Securities, in his monthly contribution to TD Securities Dataflash. “The surprising gain in core inflation marks the second consecutive month of above-average core prices.”

Economists and the Federal Reserve are looking for a steady boost in inflation to confirm that the economy is strong enough to handle interest rate increases. With unemployment holding firmly at 4.9 percent in February and 242,000 jobs created, it’s becoming clear that Americans are feeling more economically secure. However, the Fed seems to be waiting for consistent good news on the health of the economy to start raising interest rates– consumer prices are a crucial indication of strength.

In last last 12 months, inflation has risen at a one percent rate. Still, not at the Fed’s preferred two percent rate, but Mulraine is confident that the Fed will “stay on the sidelines” and wait to raise rates until June. The results of this report were impressive, Mulraine said and bode well for the economy.

Food and energy costs are consistently volatile, thus the core price index is a more accurate representation of overall prices, since it doesn’t include those two unwieldy factors. The energy index, seasonally adjusted, dropped six percent, caused by a cliff-dive in the gas index of 13 percent.

The index for all items less food and energy rose 0.3 percent again in February, as in January. This increase was driven by price spikes in home and rental costs, clothing, and medical care. Save for cheaper oil, the most important prices to the average consumer are ticking upwards and have been chugging along consistently for the past few months.

The apparel index rose 1.6 percent this month, it’s largest jump since February of 2009.

Shelter costs, that’s rent and mortgage payments, jumped by 0.3 percent this month, the same increase seen in the January report.

The medical care index rose by 0.5 percent in February, identical to the prior month’s rate, driven by a sharp uptick in prescription drugs prices, of 0.9 percent. Over the last year, medical care services rose by 3.9 percent, a steep increase.

Vella Petrova, 25, is an actress living in New York City. Since leaving college four years ago, her health insurance coverage has been inconsistent, making it harder for her to afford medication. Since 2012, Petrova has been prescribed Sumadan, a medicated facial cleanser for treating acne and rosacea.

The first time she was prescribed the medication, the brand name cleanser cost around $350 without insurance. Four years later, the price of the drug has tripled to more than $1,000 for a 16 ounce bottle. When she used the less expensive generic version, it wasn’t as effective. This month when she tried to get a new prescription, she was priced out of her ability to buy the drug.

“I’m not a union actor so the job I have that actually pays my bills is not in an office or 40 hours a week. I’m not going to be on any company’s health insurance,” she said. “The only plans I can afford on my own don’t cover Sumadan, so I either have to buy the generic or nothing.”