U.S. Inflation Increase Slightly as CPI Rises 2.4% Year Over Year in February
U.S. inflation remained stable in February as consumer prices increased modestly, reinforcing expectations that price pressures continue to cool gradually.
Key Takeaways
- Headline CPI: +0.3% month over month
- Annual inflation: 2.4% year over year
- Core CPI (excluding food and energy): +0.2% monthly, +2.5% yearly
- Food prices: +0.4% monthly, +3.1% yearly
- Energy prices: +0.6% monthly, +0.5% yearly
- Shelter costs: +0.2% monthly, continuing to drive inflation
The Consumer Price Index (CPI) rose 0.3% in February, following a 0.2% increase in January, according to data released by the
U.S. Bureau of Labor Statistics. On an annual basis, the headline index climbed 2.4% year over year, unchanged from the previous month.
Shelter costs once again drove much of the monthly increase, while food and energy prices also contributed to the overall rise.
Shelter Continues to Lead Monthly Price Gains
Housing costs remained the largest contributor to February’s inflation increase.
The shelter index rose 0.2% during the month, reflecting ongoing pressures in the housing and rental markets. The owners’ equivalent rent index also climbed 0.2%, while rent increased 0.1%, marking the smallest monthly gain since January 2021.
Other services-related categories also rose, including medical care (+0.5%), airline fares (+1.4%), and apparel (+1.3%).
Food Prices Rise as Grocery Costs Increase
Food prices increased 0.4% in February, driven largely by higher grocery prices.
The food-at-home index rose 0.4%, with notable increases in:
- Fruits and vegetables (+1.4%)
- Nonalcoholic beverages (+0.8%)
- Other food at home (+0.8%)
However, some categories declined, including dairy products (-0.6%) and cereals and bakery products (-0.2%).
Food prices overall are 3.1% higher than a year ago, with restaurant prices continuing to rise faster than groceries. The food-away-from-home index increased 3.9% year over year.
Energy Prices Edge Higher
Energy costs rebounded slightly after declining in January.
The energy index rose 0.6% in February, led by higher fuel prices.
- Gasoline: +0.8% month over month
- Natural gas: +3.1%
- Electricity: -0.7%
On a yearly basis, energy prices are 0.5% higher, reflecting a large increase in natural gas costs (+10.9%) offset by lower gasoline prices (-5.6%).
Core Inflation Shows Gradual Cooling
Core inflation, which excludes volatile food and energy prices, rose 0.2% in February.
The core CPI increased 2.5% over the past year, unchanged from January.
While several categories saw price increases, some areas posted declines, including:
- Used cars and trucks (-0.4%)
- Communication services (-0.5%)
- Motor vehicle insurance (-0.3%)
- Personal care (-0.2%)
The continued moderation in core inflation suggests that broader price pressures are stabilizing even as services inflation remains persistent.
Inflation Remains Near Multi-Year Lows
Overall, the February report shows inflation remaining close to its lowest levels in several years.
The CPI-U index rose 2.4% over the past 12 months, while the CPI-W index increased 2.2% annually. The chained CPI (C-CPI-U) also increased 2.2% year over year, though the figure is subject to revisions.
The data suggests that inflation remains well below the peaks seen in 2022 and 2023, though certain service categories continue to exert upward pressure on consumer prices.
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