HomeInflationU.S. Inflation Stubbornly High with February CPI at 6%

U.S. Inflation Stubbornly High with February CPI at 6%

The annual rate of inflation slowed for an eighth straight instance and marked the lowest level in seventeen months, according to a U.S. government report released Tuesday, March 14, however, U.S. consumer prices remained elevated and underlying or core inflation ticked higher in February.

Americans felt some reprieve in March in what they had to pay at the gas pumps and to heat their homes. They also spent a smidgen less for groceries compared to January. Inflation pressures remained, however, with prices high for many goods and services, some of which had even increased since before, like for housing.

In the headline monthly figure, U.S. consumer prices increased by 0.4% in February, following a 0.5% increase 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 eggs to energy.

Overall food prices eased a bit in February, up 0.4% for the month compared to 0.5% in January. Within the category, the rate of increase in grocery prices slowed a tad to 0.3% compared to the 0.4% increase in the previous month, while the cost of eating out rose 0.6% for a second month in a row.

Food inflation during the past year remained elevated at 9.5%, down from 10.1%. In the same time, grocery prices increased by 10.2% from 11.3%, and the cost of foods consumed outside of the home increased by 8.4% from 8.2%.

Elsewhere, prices at the pump rose 1% in February after increasing 2.4% in January. The year-on-year level fell by 2% after climbing 1.5% previously. Looking back for some perspective, the highest level of gasoline inflation in the past year occurred in the 12 months ending June, when it reached 59.9%, the highest level since March 1980.

The broader index for energy, which combines items like gasoline, electricity, and fuel oil, declined 0.6% for the month after increasing by 2% in the previous period. Energy prices year-over-year rose 5.2%, down from 8.7% previously.

Excluding the more volatile food and energy components, the rate of core consumer prices quickened to 0.5% in February from 0.4% in the previous month.

Shelter or housing prices for the month advanced to 0.8% from 0.7%, while they surged 8.1% year-over-year for their largest 12-month increase since June 1982.

"The index for shelter was the largest contributor to the monthly all items increase, accounting for over 70 percent of the increase, with the indexes for food, recreation, and household furnishings and operations also contributing," the Labor Department’s monthly report said.

Components of shelter include prices of items like rent for apartments, rental equivalence, lodging away from home such as hotels and motels, and housing at schools. This index accounts for about one-third of the entire CPI.

In other closely watched pricing categories:

  • Clothing prices for the month rose 0.8% for a second straight month. They increased 3.3% from a year ago.
  • New vehicle prices increased 0.2% for a second month in a row, for 22 straight advances, while they climbed 5.8% year-over-year.
  • Prices for used cars and trucks, however, dropped for an eight consecutive month, falling 2.8% most recently, while their year-on-year level fell 13.6%. As a stark contrast, a year ago February they logged a soaring year-on-year pace of 41.2%.
  • Compared to a year earlier, airline fares jumped 26.5% from 25.6%. They soared 6.4% in February, after sliding 2.1% in January for their fourth straight decline.

As for the headline annual figure, inflation rose 6% from a year earlier compared to 6.4% previously. The rate marks the smallest annual gain since September of last year. For some perspective, last year’s high-water mark happened in the 12-month period ending July at 9.1%, which registered as the fastest rate of inflation since November 1981. Still, inflation rates have now been at or above 6% for seventeen consecutive months.

Meanwhile, core inflation rose 5.5% over the past year against 5.6% 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 guides the central bank when setting its key interest rate. As recently as September, the core rate at 6.6% was the highest since August 1982. Many economists consider the core reading as a better predictor for future inflation.

"Inflation is proving too sticky for the Fed’s liking and, at the moment, likely weighs toward a 25-basis-point rate increase next week," Reuters quoted Sal Guatieri, a senior economist at BMO Capital Markets in Toronto. "But the central bank is also caught between the rock of stubborn inflation and a hard place of financial instability."

"What was a tricky task for the Fed, raising rates by enough to cool off inflation, but not by too much as to push the economy into recession, has gotten even more difficult with the recent bank failures," MarketWatch quoted chief economist Gus Faucher of PNC Financial Services. "The big increase in interest rates over the past year is exposing stresses in the financial system."

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 14, 2023. 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 2022 to February 2023 Consumer Prices – Gains & Losses in Percent
(Seasonally Adjusted from Prior Month and Unadjusted 12-Month)

  Aug 2022 Sept 2022 Oct 2022 Nov 2022 Dec 2022 Jan 2023 Feb 2023 12 Month
All items 0.2 0.4 0.5 0.2 0.1 0.5 0.4 6
  Food 0.8 0.8 0.7 0.6 0.4 0.5 0.4 9.5
    Food at home 0.8 0.7 0.5 0.6 0.5 0.4 0.3 10.2
    Food away from home 0.9 0.9 0.9 0.5 0.4 0.6 0.6 8.4
  Energy -3.9 -1.7 1.7 -1.4 -3.1 2 -0.6 5.2
    Energy commodities -8 -4.1 3.7 -2.1 -7.2 1.9 0.5 -1.4
      Gasoline (all types) -8.4 -4.2 3.4 -2.3 -7 2.4 1 -2
      Fuel oil -5.9 -2.7 19.8 1.7 -16.6 -1.2 -7.9 9.2
    Energy services 1.8 1.2 -0.7 -0.6 1.9 2.1 -1.7 13.3
      Electricity 1.2 0.8 0.5 0.5 1.3 0.5 0.5 12.9
      Utility (piped) gas service 3.5 2.2 -3.7 -3.4 3.5 6.7 -8 14.3
  All items less food, energy 0.6 0.6 0.3 0.3 0.4 0.4 0.5 5.5
    Commodities less food, energy 0.4 0 -0.1 -0.2 -0.1 0.1 0 1
      New vehicles 0.8 0.7 0.6 0.5 0.6 0.2 0.2 5.8
      Used cars and trucks -0.2 -1.1 -1.7 -2 -2 -1.9 -2.8 -13.6
      Apparel 0.3 0 -0.2 0.1 0.2 0.8 0.8 3.3
      Medical care 0.2 -0.1 0 0.2 0.1 1.1 0.1 3.2
    Services less energy 0.6 0.8 0.5 0.5 0.6 0.5 0.6 7.3
      Shelter 0.7 0.7 0.7 0.6 0.8 0.7 0.8 8.1
      Transportation 1 1.9 0.6 0.3 0.6 0.9 1.1 14.6
      Medical care 0.7 0.8 -0.4 -0.5 0.3 -0.7 -0.7 2.1


The BLS releases inflation data around the middle of the month for consumer prices surveyed up to the previous month. The Consumer Price Index (CPI) for February and the latest annual period will be made public on April 12, 2023.

The CPI data is also used to calculate inflation rates and to power this site’s U.S. Inflation Calculator. The U.S. Inflation Calculator displays the cumulative inflation and the change in the buying power of the U.S. dollar over time.


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