Inflation in the United States would have been exceptionally tame in February had it not been been for surging gasoline prices, according to a government report released Wednesday, March 10, as underlying inflation pressures remained weak.
Annual inflation increased the most since a year ago, driven up by energy which had previously logged 11 straight annual pricing declines. Energy and food prices increased together year-over-year for the first time since February 2020.
U.S. consumer prices rose 0.4% in February after advancing 0.3% in January, the Labor Department said in its monthly report on the Consumer Price Index (CPI). The CPI is a broad measure of what Americans pay for everyday items ranging from flour to fuel.
In key consumer pricing categories:
Prices at the pump moved up 6.4% in February following a 7.4% increase in January. The Labor Department noted that over half of the CPI gain resulted from this increase. Gasoline prices rose 1.5% year-over-year.
The broader index for energy, which combines items like gasoline, electricity and fuel oil, advanced 3.9% for the month from 3.5% previously. Energy prices rose 2.4% in the past 12 months.
- Prices for food in February picked up 0.2% from 0.1%. Food prices rose 3.6% year-over-year.
"Outside of rising energy costs, inflation pressures remained relatively tame in February," MarketWatch quoted chief investment officer Jim Baird of Plante Moran Financial Advisers. "That’s likely to change in the near term, but outsized increases over the next few months aren’t likely to become entrenched."
Excluding the more volatile food and energy components, so-called core consumer prices edged up 0.1% after registering unchanged for two months in a row.
"The indexes for shelter, recreation, medical care, and motor vehicle insurance all increased over the month. The indexes for airline fares, used cars and trucks, and apparel all declined in February," the Labor Department’s monthly report said.
Shelter or housing costs rose 0.2% in February following six consecutive gains of 0.1%. They increased 1.5% from a year ago. Components of shelter include pricing items like rent for apartments, rental equivalence, lodging away from home such as hotels and motels, and housing at schools. The index accounts for about one-third of the entire CPI.
Health care prices grew 0.3% in February after increasing 0.4% in January. Health care costs increased 2% year-over-year.
In the headline figure, inflation in the United States rose 1.7% in the 12 months ended February, the biggest increase since the annual period ending February 2020 and compared to 1.4% previously.
Core inflation increased 1.3% over the past 12 months against 1.4% previously. The core, "all items less food and energy" index is one of the benchmark inflation rates monitored by the Federal Open Market Committee (FOMC) as it helps the central bank decide where to set its key interest rate.
"Base effects and one-time price increases stemming from the reopening of the economy and some pass-through of higher prices from supply chain bottlenecks should lift core inflation to 2.5% in the spring," Reuters quoted Kathy Bostjancic, chief U.S. financial economist at Oxford Economics in New York.
"However, the acceleration in inflation will be transitory and will not represent the start of an upward spiral."
The following table of key inflation figures is for the last seven months through February, as published by the U.S. Labor Department’s Bureau of Labor Statistics (www.bls.gov/cpi) on March 10, 2021. To index the data each month, the BLS monitors the prices of about 80,000 consumer goods and services from around the nation. All monthly and annual pricing changes are in percentages.
August 2020 to February 2021 Consumer Prices – Gains & Losses in Percent
|August 2020||September 2020||October 2020||November 2020||December 2020||January 2021||February 2021||12 Month|
|Food at home||.0||-0.3||0.1||-0.2||0.3||-0.1||0.3||3.5|
|Food away from home||0.3||0.6||0.3||0.1||0.4||0.3||0.1||3.7|
|Gasoline (all types)||2.1||1.7||0.7||0.5||5.2||7.4||6.4||1.5|
|Utility (piped) gas service||-0.1||3.1||0.4||3.0||-0.4||-0.4||1.6||6.7|
|All items less food, energy||0.3||0.2||0.1||0.2||.0||.0||0.1||1.3|
|Commodities less food, energy||1.0||0.5||.0||.0||0.1||0.1||-0.2||1.3|
|Used cars and trucks||5.7||5.3||0.9||-1.4||-0.9||-0.9||-0.9||9.3|
|Services less energy||0.1||0.1||0.1||0.2||.0||.0||0.2||1.3|
The BLS tends to release inflation data around the middle of a month based on consumer prices surveyed in the previous month. The Consumer Price Index (CPI) for March and the latest annual period become public on April 13, 2021.
CPI data is used in calculating inflation rates and in this site’s U.S. Inflation Calculator. The US Inflation Calculator shows cumulative inflation and the change in buying power of the U.S. dollar over time.