The Bureau of Labor Statistics reported on Wednesday that prices for goods and services rose less than anticipated in February, offering some relief to those wary of tariffs potentially driving inflation higher.
The consumer price index (CPI), which covers a wide array of costs across the U.S. economy, edged up by a seasonally adjusted 0.2% for the month, setting the annual inflation rate at 2.8%. In comparison, January saw a larger increase of 0.5%.
When excluding the typically volatile food and energy sectors, the core CPI similarly increased by 0.2% for the month and registered at 3.1% year-over-year, marking its lowest level since April 2021. January had witnessed a 0.4% rise in the core CPI.
These figures came in below expectations, as economists polled by Dow Jones had predicted 0.3% upticks in both headline and core CPI, with corresponding annual rates of 2.9% and 3.2%, respectively, which is 0.1 percentage point higher than the actual figures reported.
Both food and energy categories saw 0.2% hikes in February. Used vehicle prices surged by 0.9%, and apparel experienced a 0.6% uptick. In the food category, egg prices leaped by 10.4%, reaching an astonishing 58.8% increase over the year. This surge has impacted a broader food measure that includes meat, poultry, and fish, driving it up by 7.7% on an annual basis. Meanwhile, beef prices increased 2.4% during February.
Shelter expenses, which represent a significant portion of the CPI’s total weighting, increased by 0.3%, a slower pace than January, yet they accounted for roughly half of February’s CPI rise. The annual increase of 4.2% in shelter costs is the smallest gain since December 2021. This category heavily weighs on estimates by homeowners regarding potential rental income from their properties, which also went up by 0.3%.
