Inflation eased more than expected in February, a welcome sign for the Federal Reserve as it grapples with the prospect of higher prices and slower growth as a result of President Trump’s trade war.
The Consumer Price Index was up 2.8 percent from a year earlier, after rising another 0.2 percent on a monthly basis. That was a step down from January’s surprisingly large 0.5 percent increase and came in below economists’ expectations.
The “core” measure of inflation, which strips out volatile food and fuel prices to give a better sense of the underlying trend, also ticked lower. The index rose 0.2 percent from the previous month, or 3.1 percent from a year earlier. Both percentages were below January’s increases.
The data from the Bureau of Labor Statistics underscored the bumpy nature of the Fed’s progress toward its 2 percent goal. Prices for consumer staples, such as eggs and other grocery items, are rising steeply again, but costs for other categories like gasoline fell. A 4 percent drop in airfares in February was a primary driver of the better-than-expected data.
Egg prices rose another 10.4 percent in February, as an outbreak of avian influenza continued to exacerbate a nationwide egg shortage. Prices for eggs are up nearly 60 percent since last year. Food prices more broadly rose 0.2 percent, or 2.8 percent from a year earlier.
The cost of used cars also rose 0.9 percent in February, although new vehicle prices declined slightly. Car insurance, which was a huge driver of the index’s unexpectedly large increase in January, rose again, but at a much slower pace of 0.3 percent. It is up just over 11 percent over the past year.
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Monthly changes in Febraury
Piped utility gas service
+2.5%
Meats, poultry, fish, and eggs
+1.6
Electricity
+1
Used cars and trucks
+0.9
Fuel oil
+0.8
Apparel
+0.6
Tobacco and smoking products
+0.6
Alcoholic beverages
+0.5
Cereals and bakery products
+0.4
Food away from home
+0.4
Physicians’ services
+0.4
Rent of primary residence
+0.3
Motor vehicle insurance
+0.3
All items
+0.2
All items excluding food and energy
+0.2
Medical care commodities
+0.1
Fruits and vegetables
−0.5%
Nonalcoholic beverages
−0.5
Dairy products
−1
Gasoline (all types)
−1
−4
Airline fares
Monthly changes in February
Piped utility gas service
+2.5%
Meats, poultry, fish, and eggs
+1.6
Electricity
+1
Used cars and trucks
+0.9
Fuel oil
+0.8
Apparel
+0.6
Tobacco and smoking products
+0.6
Alcoholic beverages
+0.5
Cereals and bakery products
+0.4
Food away from home
+0.4
Physicians’ services
+0.4
Rent of primary residence
+0.3
Motor vehicle insurance
+0.3
All items
+0.2
All items excluding food and energy
+0.2
Medical care commodities
+0.1
Fruits and vegetables
−0.5%
Nonalcoholic beverages
−0.5
Dairy products
−1
Gasoline (all types)
−1
Airline fares
−4
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Source: Economy - nytimes.com
