WASHINGTON–The consumer price index increased a seasonally adjusted 0.3% during February, putting the 12-month inflation rate at 2.4%, according to new Bureau of Labor Statistics data.
Stripping out volatile food and energy prices, the core CPI posted a 0.2% monthly reading and 2.5% annual rate, compared with forecasts for 0.2% and 2.5%, which are in line with what economists had been expecting.
The annual rates were unchanged from January, indicating that inflation was holding above the Federal Reserve’s 2% target.
“Inflation held steady year over year in February, with core inflation continuing to ease,” Dawit Kebede, senior economist with America’s Credit Unions, said in a statement. “Inflation held steady year over year in February, with core inflation continuing to ease. Core goods prices have remained flat over the last three months, suggesting that the impact of tariffs is becoming less of a factor. Housing costs saw a modest monthly increase over the same period.
“The Federal Reserve is expected to hold rates – probably for longer as the ongoing conflict in the Middles East will probably put upward pressure on prices in the months ahead, particularly on food and energy,” Kebede continued.
Inflation by Category
Specifically, the report shows:
- Shelter, which is the single-biggest component of the CPI, posted a 0.2% increase, putting the annual rate at 3%. Within the category, rent rose just 0.1%, the smallest monthly increase since January 2021.
- Apparel prices, which are sensitive to tariff pressures, saw a 1.3% monthly gain, the biggest jump since September 2018.
- New vehicle prices were steady and up just 0.5% from a year ago
- Energy rose 0.6% and also saw a 0.5% annual increase.
- Food prices accelerated 0.4% for the month and were up 3.1% from a year ago. Egg prices fell 3.8%, putting the annual drop at 42.1%.
Economists noted all of the data predates the recent surge in oil prices tied to the war with Iran, meaning any effects from higher energy costs will likely show up in the months ahead.
The Fed will release its next interest rate decision on March 18.
