The rise in Consumer Prices met expectations for February, a sign that the economy is not overheating, and interest rate hikes are unlikely in the near future.

After three months of no change, the 0.2 percent rise in prices was considered moderate, and in keeping with a slowing domestic and global economy. Drops in auto sales and prescription drug prices were countered by increases in housing, recreation, food and gasoline.

“Growth is slowing here and abroad and its taking some of the steam out of inflation,” said Richard Moody, chief economist at Regions Financial Corporation. “I think it’s likely we will see inflation pick up in the latter part of this year.”

Consumer prices, less food and energy, increased by 0.1 percent, after five straight months of 0.2 percent increases. A combination of drug prices and vehicle prices depressed core prices in February.

The drop in drug prices was unexpected, but was the result of declining prescription drug prices, the largest monthly drop since October 1971. This accounted for virtually all of the discrepancy in economists’ predictions. The annual rate of inflation for medical care commodities is something that has been slowing since the middle of last year.

Brand name prescription drug patents are expiring, and competing with generic drugs hitting the market. One of the most prescribed drugs, Cialis, for erectile dysfunction, recently went generic. Cialis is $400 for 30 tablets, and the generic, Tadalafil, is $100 for 30 tablets. A total of 24 major drug patents will expire by the end of 2019, with a total of 43 expensive prescription drugs going generic through 2022. The trend in decreasing drug prices will continue.

The opioid crisis has contributed to drops in drug prices. Tighter restrictions have resulted in steep reductions in opioid prescriptions. Vicodon and OxyContin were among the most prescribed drugs last year. More than half of cancer patients who are in treatment or in advanced stage cancer use them.

This year, 16 generic drugs were already approved by the FDA, including Advair which has over 60 percent of the market share for asthma medications. If a generic version of a drug is available, insurance companies normally will only cover the generic version for their policyholders.

“Most patients are insured, therefore insurance companies prefer generic drugs 90 percent of the time because they are cheaper,” said Nermeen Riad, a Manhattan pharmacist.

There are still many frequently prescribed drugs that are not generic, and are paid out-of-pocket by patients. Mary Saweres, a medicare recipient, has not felt any relief from expensive prescription drug prices. Saweres said there are no generics for her drugs. Her diabetes management requires Lyrica and Januvia. Lyrica costs her about $750 per month, and Januvia almost $500, both out-of-pocket costs.

The other notable drop was in vehicle sales, with a 0.7 percent drop in used vehicle prices and 0.2 percent drop in new vehicles.

“Used car prices are going to be more volatile,” said Ted Kontos, chief economist at KAR Auction Services. “And we’re not going to hit the record highs in new car sales of previous years either.”

The drop in vehicle prices, both used and new, is not significant considering that it is February. The weather has been severe across the country.

“There’s a blizzard here in Colorado,” said Ivan Drury, senior analyst at Edmunds. “No one is going to buy a car in a blizzard or a hurricane. They’re going to wait for the weather to be nice.”

Despite the weather, there is an expectation that prices should be rising in an economy with historically low unemployment, continuing wage growth and an average of 186,000 jobs being added per month.

Businesses are not passing along the price increases to the final customer. Economists suspect that the country is not close enough to full employment. The unemployment rate may not be accurately depicting what is going in the labor force.

There is still a large pool of people who exited the labor force during the recession in 2008 who are not looking for work, but are not content being unemployed. There hasn’t been evidence of running out of workers either.

There have been no labor bottlenecks, and wages increased without consumer prices rising above the Federal Reserve’s bar. There is no evidence of building pressure on core consumer prices, which means that wages have room to grow.

I think the relationship between inflation and the unemployment number is weaker than in past cycles,” said Ryan Sweet, real-time economist for Moody Analytics. ”The relationship Is flat as a pancake.”

Inflation will play an important part in any story on further rate hikes. The economy was growing around 3 percent last year, and is predicted to grow  2-2.5 percent this year. In this slow burn economy, the luminescence could go on for another year or two beyond the blue zone. It is not far fetched that the Federal Reserve would hold out until after the presidential election to take action. Federal Reserve Chairman Jerome Powell told “60 Minutes” that he is confident about where the economy is, and will continue being patient.

Economists are expecting another rate hike around December even if the economy continues to taper.