WASHINGTON (MarketWatch) — American consumers paid slightly more in February for good and services such as groceries and rent, reflecting upward pressure on inflation that’s intensified since last summer. The consumer price index, or cost of living, rose by a seasonally adjusted 0.1% last month, the government said Wednesday.. It was the smallest increase since last July. Economists polled by MarketWatch had forecast a 0.1% gain. Although the increase in prices tapered off in February after a big spike in the first month of the year, inflation has risen sharply since the middle of 2015. The increase in inflation over the past 12 months, for example, advanced to 2.7% in February from 2.5% in January, putting it at the highest level since early 2012. Just a year and a half ago inflation was basically dormant. Higher inflation, low unemployment and a steadily growing economy are expected to underpin a decision by the Federal Reserve later on Wednesday to raise a key short-term interest rate that helps determine the cost of borrowing for businesses and consumers. The Fed wants to make sure the economy does not overheat and inflation does not get out of hand. Although a rebound in energy prices is mostly responsible for breathing life into inflation, Americans also pay more for rent, new or previously owned homes, car insurance, airline tickets and other staples.

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