NEW YORK (CNN/Money) - Consumer prices rose in the United States in February, the government said Thursday, though inflation remained a distant threat at the end of the economy's first recession in a decade.

The Labor Department said the Consumer Price Index, the government's main inflation gauge, rose 0.2 percent in February after rising 0.2 percent in January. Economists surveyed by Briefing.com expected CPI to rise 0.2 percent.

Excluding often volatile food and energy prices, the "core" CPI rose 0.3 percent after rising 0.2 percent in January. Economists surveyed by Briefing.com expected core CPI to rise 0.2 percent.

"Today's figures simply reflect an economy still emerging from a recession; there's certainly nothing here to suggest inflation rising from the ashes," said Oscar Gonzalez, economist with John Hancock Financial Services. "In terms of impact, it might as well be ancient history, especially now. The Federal Reserve is back to worrying about where inflation will be in six months, not where it was last month."

Helping keep inflation tame was a 0.8 percent drop in energy prices, following a 0.9 percent gain in January. Food prices rose 0.2 percent after gaining 0.3 percent in January. Health-care and housing costs each rose 0.3 percent, while the cost of tobacco products rose a whopping 3.8 percent.

Separately, the Labor Department said new claims for unemployment benefits fell to 371,000 last week from a revised 383,0000 the prior week. Economists surveyed by Briefing.com expected new claims of 375,000 in the latest week.

In another report, the Conference Board, a private research firm, said its index of 10 leading economic indicators was unchanged at 112.4 in February after rising an upwardly revised 0.8 percent in January. Economists surveyed by Briefing.com expected the index to rise 0.1 percent.

And the Federal Reserve Bank of Philadelphia said its index of manufacturing activity in the Philadelphia region showed growth for the third straight month in February, but fell to 11.4 from 16.0 in January. Economists surveyed by Briefing.com expected the index to rise to 18.0.

U.S. stock prices and Treasury bond prices were mixed in midday trading.

To help set the stage for a recovery from a recession that some economists think began in March 2001, the Federal Reserve, which is charged with keeping the economy growing while also keeping inflation in check, cut its target for short-term interest rates 11 times in 2001, a record for a calendar year.

At its first two meetings in 2002, the Fed decided to leave rates at 40-year lows. But at its latest meeting, it said for the first time in more than a year that the risks to the economy were balanced between a risk of weakness and a risk of inflation, setting the stage for an eventual rise in short-term rates.

Economists are divided about the pace and timing of the Fed's rate-raising campaign, but it could begin as early as its next policy meeting, scheduled for May 7, if the unemployment rate falls in March and April, many economists believe.

Unemployment usually rises even as the economy recovers, and the Fed has said it expects it to rise to between 6 and 6.25 percent this year. But it fell in January and February after peaking at 5.8 percent in December. If it continues to fall, it would be a signal that the economy is stronger than the Fed thinks.

"Get ready for Fed rate hikes, and be prepared for higher benchmark Treasury yields by year's end," John Lonski, chief economist and bond market analyst at Moody's Investors Service, told CNNfn's Before Hours program. Treasury bond yields rise as prices fall.

Inflation worries usually drive long-term interest rates higher, which could put a damper on the red-hot housing market by pushing up mortgage rates. CPI rose a paltry 1.1 percent between Feb. 2001 and Feb. 2002, according to unadjusted data from the Labor Department, but will likely gain strength along with the economy, especially in the area of services such as health-care and education.

Health-care prices soared 4.5 percent between Feb. 2001 and Feb. 2002, while education costs rose 6.2 percent. Easing the pain, transportation costs fell 4.2 percent during the trailing 12 months, while apparel costs fell 3.8 percent. None of the past-year data are adjusted for seasonal factors.

"With such a stark difference between goods and services inflation, the issue is: 'Can the Fed do anything about the surge in services prices?'" said Joel Naroff, chief economist at Naroff Economic Advisors. "Can monetary policy limit the rise in medical care or education or tobacco prices? Probably not."

In its jobless claims report, the Labor Department said the four-week moving average of new jobless claims, which smoothes out fluctuations in the weekly data, rose to 379,000 last week from a revised 376,500 the prior week.

Continued claims, the number of people who have been out of work for a week or more, rose to 3.46 million in the week ended Mar. 9, the latest data available, from a revised 3.45 million in the prior week.

Related links       Special Report: Eyes on the Fed CNN/Money economic calendar

The Conference Board, which publishes a closely watched monthly report on consumer confidence, said the 5 leading indicators that improved in February were money supply, weekly jobless claims, average weekly manufacturing hours, building permits and vendor performance, which is the ability of goods suppliers to get goods to customers.

Its coincident indicators index, which measures current economic conditions, rose 0.2 percent, while its lagging index fell 0.3 percent.

"The modest gains in the coincident index appear to be gaining momentum," the firm said in its report. "Should this trend continue, the trough of the recession would most likely be November 2001, making the most recent economic contraction very short and certainly the mildest in U.S. history."