NEW YORK (CNNMoney.com) - The government's latest reading on consumer prices, issued Thursday, showed a decline in inflationary pressures due to lower energy prices.

The Consumer Price Index, the key measure of inflation at the retail level, edged up 0.1 percent in February, after a 0.7 percent rise in January. That met the consensus forecast of economists surveyed by Briefing.com. Energy prices fell 1.2 percent from January following a five percent gain in January.

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The more closely watched core CPI, which excludes often volatile food and energy prices, rose 0.1 percent, which was less than the 0.2 percent rise forecast by economists, as well as the 0.2 percent rise seen in January.

CPI is being closely watched by investors and economists, as the Federal Reserve has signaled it will look at economic reports before deciding whether to continue its path of interest rate increases. The central bank raises rates to slow the economy and keep prices stable.

Another quarter-percentage point increase is widely expected at the Fed meeting March 27 and 28, but there is more debate about what the Fed will do at its next meeting in May. Bond prices rose and the yield on the benchmark 10-year treasury fell to 4.70 percent following the CPI report, as investors saw lessening inflationary pressure and the possibility of the Fed stopping after the March meeting.

The report Thursday showed the 12-month rise in the core CPI up 2.1 percent, keeping it near the level assumed to be the Fed target for that reading. Overall CPI is up 3.6 percent over the last 12 months, which is slightly above the 3.5 percent rise in average wages during the same period, according to a separate Labor Department report. That means the average hourly employee's paycheck lost ground slightly to price increases over the last year.

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