U.S. CPI Picks Up in February; Core Prices Remain Elevated Y/Y

The Consumer Price Index increased 0.4% during February following a 0.3% January gain. The rise matched expectations in the Action Economics Forecast Survey. The 3.2% y/y rise remained below the peak 9.1% y/y increase in June of 2022, but the three-month increase of 4.0% (AR) was double the rise at the end of last year. Prices excluding food & energy rose 0.4% for the second consecutive month. A 0.3% increase had been expected. The 3.8% y/y increase remained below the peak 6.6% y/y gain in September 2022. During the last three months, however, core prices accelerated to 4.2% (AR), up from 2.6% six months earlier, reaching the highest rate since May of last year.

The CPI less food, energy and shelter, another measure of core pricing power, rose 0.3% following four straight months of 0.2% increase. The 2.2% y/y increase remained up from the 2.0% y/y October low, but was below the 7.6% y/y peak in February 2022.

Energy prices rose 2.3% (-1.9%) following four straight months of decline. Gasoline prices rose 3.8% after four consecutive months of decline, though down 3.9% y/y. Amongst other energy products, fuel oil prices rose 1.1% (-5.4% y/y) after falling 4.5% in January. Electricity prices rose 0.3% (3.6% y/y) after rising 1.2%, while natural gas prices strengthened 2.3% (-8.8% y/y) about as they did in January.

Food prices held steady (+2.2% y/y) last month following a 0.4% increase. Egg prices jumped 5.8% (-17.0% y/y), the fourth straight month of strong increase. Meat, poultry & fish prices declined 0.3% (+1.1% y/y) after falling 0.2% in January, while cereal & bakery product prices rose 0.5% (+1.7% y/y) after easing 0.2% in January. Fruit & vegetable prices weakened 0.2% (+0.8% y/y) after rising 0.4%, while dairy prices declined 0.6% (-1.8% y/y) after a 0.2% January gain. Nonalcoholic beverage prices eased 0.2% (+2.3% y/y) after a 1.2% increase.

Service costs less energy increased 0.5% in February (5.2% y/y) following a 0.7% gain. Transportation services costs jumped 1.4% (9.9% y/y) after moving 1.0% higher in January. The cost of shelter rose 0.4% (5.7% y/y) for the third month in the last four as owners’ equivalent rent of primary residences increased 0.4% (6.0% y/y) after a 0.6% gain. Rents of primary residences increased 0.5% (5.8% y/y) after rising 0.4% for three straight months. The cost of lodging away from home rose 0.1% (-0.4% y/y) after surging 1.8% in January. Education & communication prices moved 0.5% higher (1.5% y/y) after a 0.4% increase. Recreation service prices rose 0.5% (4.5% y/y) following a 0.4% rise, and medical care service costs eased 0.1% (+1.1% y/y) after a 0.7% increase.

In February, the CPI for goods less food & energy moved up 0.1% (-0.3% y/y) following three straight months of modest decline. Education & communication goods costs rose 0.2% (-5.6% y/y) after a 0.6% rise. Recreation product prices weakened 0.2% (-1.3% y/y) after rising 0.8%. Home furnishings prices eased 0.3% (-2.3% y/y) after a 0.1% slip, while appliance costs fell 0.9% (-5.2% y/y) and reversed the January increase. Apparel prices rose 0.6%, unchanged y/y, after falling 0.7% in January and new vehicle prices eased 0.1% (+0.4% y/y) after holding steady in January. Used car & truck prices rose 0.5% (-1.8% y/y) after a 3.4% decline.

The Consumer Price figures can be found in Haver's USECON database. The expectations figure is contained in the AS1REPNA database.