Inflation Holds Steady Amid Rises in Energy and Food Costs
In February, consumer prices increased 0.3% from January and 2.4% over the year, unchanged from the 2.4% annual rise in January. Core CPI, which excludes more volatile energy and food prices, rose 0.2% from January and 2.5% over the year, also unchanged from the 2.5% 12-month increase the month prior.
Energy costs advanced 0.6% over the month in February, after declining 1.5% in January. Over the year, energy costs rose 0.5%, after inching down 0.3% year-over-year in January. Within the energy index, gasoline prices ticked up 0.8% in February but were still down 5.6% over the year, while fuel oil prices jumped 11.1% month-over-month and 6.2% year-over-year. Meanwhile, electricity prices edged down 0.7% in February but increased 4.8% from February 2025, while natural gas prices surged 3.1% over the month and 10.9% over the year.
In February, food prices grew 0.4% over the month and 3.1% over the year, after increasing 2.9% year-over-year in January. Prices for food at home advanced 0.4% from January and 2.4% from February 2025, while prices for food away from home climbed 0.3% month-over-month and 3.9% year-over-year. Of the different food groups, beef and veal and coffee continue to rise at the fastest pace, soaring 14.4% and 18.4% over the year, respectively.
The shelter index rose 0.2% from January and 3.0% over the year, consistent with the 3.0% annual gain in January. Meanwhile, prices for used cars and trucks fell 0.4% over the month and 3.2% over the year, while new vehicle prices stayed the same over the month but ticked up 0.5% from February 2025. Relatedly, prices for motor vehicle maintenance and repair jumped 0.9% month-over-month and 5.6% year-over-year.
Although the headline inflation rate is still above the Federal Reserve’s target of 2.0%, it has moderated back closer to 2025 lows. Federal Reserve officials held their interest rate target steady at their January meeting, and markets anticipate that the Federal Open Market Committee will keep its interest rate target unchanged again at this week’s meeting. Since its last meeting, risks to the Federal Reserve’s employment and inflation mandates have both risen.