February’s Consumer Price Index (CPI) report showed inflation pressures eased in February, calming some fears about the health of the US economy during a rocky few weeks for markets.
The latest data from the Bureau of Labor Statistics showed that the Consumer Price Index (CPI) increased 2.8% over the prior year in February, below January’s 3% annual gain and ahead of economist expectations of a 2.9% annual increase.
The index rose 0.2% over the previous month, a deceleration from the 0.5% increase in January and a beat compared to economists’ estimates of a 0.3% monthly uptick.
On a “core” basis, which strips out the more volatile costs of food and gas, prices in February climbed 0.2% over the prior month, lower than January’s 0.4% monthly gain, and 3.1% over last year — the lowest yearly increase in core CPI since April 2021.
This also marked a downtick from the 3.3% core price increases seen in the prior-month period and was ahead of Bloomberg consensus estimates.
It was the first time since July that both headline and core CPI showed a deceleration in price growth.
Core inflation has remained stubbornly elevated due to sticky costs for shelter and services like insurance and medical care. But shelter did show further signs of easing in February, rising 4.2% on an annual basis, the smallest 12-month increase since December 2021.
On a month-over-month basis, the shelter index increased 0.3% compared to a 0.4% uptick in January. Similarly, the index for rent and owners’ equivalent rent (OER) each rose 0.3% over the prior month. Owners’ equivalent rent is the hypothetical rent a homeowner would pay for the same property.
Meanwhile, the energy index rose 0.2% month over month after jumping 1.1% in January. On a yearly basis, the energy index was down 0.2%, dragged down by gas prices, which dropped dropped 1% after a nearly 2% increase the previous month. Coupled with the downtick in gas prices, a 4% decrease in the index for airline fares also helped ease the headline figure.
Notably, food prices showed some signs of deceleration after a few sticky readings, rising 0.2% last month after a 0.5% jump in January. Egg prices, however, continued to surge — up another 10.4% after a 15.2% upswing to kick off the year. On a yearly basis, egg prices have climbed 58.8%.
Alexandra Canal is a Senior Reporter at Yahoo Finance. Follow her on X @allie_canal, LinkedIn, and email her at alexandra.canal@yahoofinance.com.
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