Input Stories

Consumer prices increased 0.2% over the month and 2.8% over the year in February, slowing from the 3.0% over-the-year rise in January and coming in lower than expectations. Core CPI, which excludes more volatile energy and food prices, edged up to a 3.1% over-the-year increase and rose 0.2% over the month, down from 0.4% in January.

Shelter rose 0.3% over the month, accounting for nearly half of the monthly increase of the all-items index, and 4.2% over the year. Energy costs grew 0.2% over the month in February, with utility gas service leading the increase, rising 2.5%. Meanwhile, prices for gasoline fell 1.0%, while electricity prices grew 1.0% from January. Although prices for transportation services edged down 0.8% over the month, they were still up 6.0% over the year, with motor vehicle insurance leading the increase, surging 11.1% over the year.

Food prices continue inching up, rising 0.2% over the month and 2.6% over the year in February. The food at home index stayed the same over the month, but the indexes for meats, poultry, fish and eggs rose 1.6% in February. Driven by the bird flu outbreak, the index for eggs alone increased 10.4% over the month and 58.8% over the year. Food away from home rose 0.4% in February and was up 3.7% over the year.

As the over-the-year headline inflation rate remains elevated, markets are anticipating that the Federal Open Market Committee will keep rates steady at its meeting this week. This expectation was confirmed further in Federal Reserve Chairman Jerome Powell’s recent comments at an economic forum in New York where he said that the Fed is in no hurry to reduce its interest rate target.