According to the U.S. Bureau of Labor Statistics’ Consumer Price Index, the inflation rate rose 0.4% in February and the annual rate rose 3.2%, with housing and natural gas costs playing an important role in the rise in inflation.
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Data released by the U.S. Bureau of Labor Statistics on Tuesday showed that the annual inflation rate in February was 3.2%, an increase of 0.4% from the previous quarter.
Home prices and gas prices combined contributed more than 60% of February’s gains, according to the bureau. consumer price index (Consumer Price Index). Core inflation, which excludes volatile food and energy prices, fell to 3.8% annually from 3.9% in January.
The housing index fell to a monthly increase of 0.4 in February from a monthly increase of 0.6 in January, but was still up 5.7% for the year.
February’s inflation data were stronger than January’s, when inflation rose at an annual rate of 3.1% and a monthly increase of 0.3%. Although the annual growth rate of CPI was 3.2% last month, which was well below the peak of 9.1% in June 2022, it was still above the Federal Reserve’s 2% target.
Federal Reserve’s Preferred inflation indicatorThe personal consumption expenditures (PCE) price index fell to 2.4% in January, down from 2.6% in December.this personal consumption expenditure index The February version will be released on March 29th.
Some economists said the latest CPI data cast doubt on previously optimistic forecasts for the U.S. economy.
“Today’s inflation data raises questions about whether the now widely anticipated soft landing for the economy will actually materialize,” said Danielle Hale, chief economist at Realtor.com.
The latest inflation data comes eight days before the Federal Reserve’s next meeting, which is widely expected not to change interest rates. Inflation has not decelerated significantly, supporting the Fed’s forecast that it will not cut interest rates until the second half of 2024.
In his semi-annual monetary policy testimony last week, Fed Chairman Powell reiterated that the Fed will not lower its benchmark interest rate until it is clear that inflation is under control.
“The Fed wants to see more evidence that inflation is slowing before cutting rates, which may just mean that “The Fed is unlikely to cut interest rates before the second half of the year, and February’s CPI data will only confirm this.”
Editor’s note: This article has been updated to correct that the personal consumption expenditures (PCE) index is the Fed’s preferred inflation gauge.
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