WASHINGTON–Inflation cooled slightly in February, but at one credit union economist said that good news may be tempered moving by the effects of the Trump administration’s tariffs
The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.2% on a seasonally adjusted basis in February, after rising 0.5% in January, the U.S. Bureau of Labor Statistics reported. Over the last 12 months, the all items index increased 2.8% before seasonal
adjustment.
“Inflation slowed in February after elevated readings over the past three months,” said Dawit Kebede, senior economist with America’s Credit Unions. “Both headline and core prices rose by 0.2% month-over-month, aligning with the Federal Reserve’s target. Core inflation and housing recorded their lowest readings since 2021. However, the recent tariff rate increases cast a shadow on this progress. Prices of several goods affected by the tariff war are expected to rise, potentially reversing the trend and hindering economic growth.”
Additional Data
According to the BLS, the index for shelter rose 0.3% in February, accounting for nearly half of the monthly all items increase. The shelter increase was partially offset by a 4.0% decrease in the index for airline fares
and a 1.0% decline in the index for gasoline. Despite the decrease in the gasoline index, the energy index rose 0.2% over the month as the indexes for electricity and natural gas increased, the BLS said.
The index for food also increased in February, rising 0.2% as the index for food away from home increased 0.4%. The food at home index was unchanged over the month.
The index for all items less food and energy rose 0.2% in February, following a 0.4% increase in January.
Indexes that increased over the month include medical care, used cars and trucks, household furnishings and operations, recreation, apparel, and personal care, the BLS reported.
The indexes for airline fares and new vehicles were among the few major indexes that decreased in February.
The all items index rose 2.8% for the 12 months ending February, after rising 3.0% over the 12 months ending January. The all items less food and energy index rose 3.1% over the last 12 months.