Prices ticked higher in February, but there’s good news at the grocery store
New York (CNN) — Higher prices at the gas pump pushed up inflation more than expected in February, according to the latest Consumer Price Index from the Bureau of Labor Statistics.
Posted — UpdatedHowever, inflation did slow in other key areas like food and housing, fueling a touch of positive news for the Federal Reserve and consumers alike.
Overall, the closely watched inflation gauge showed that prices rose by 3.2% for the 12 months ended in February, the BLS said Tuesday. That’s up slightly from January’s annual reading of 3.1%, and higher than economists’ expectations.
On a monthly basis, CPI rose by 0.4% in February, the fastest pace since September of last year.
Stocks rose Tuesday morning as investors cheered the cooldown in some categories of inflation. The Dow rose 97 points, or 0.3%. The S&P 500 gained 0.5% and the Nasdaq Composite added 0.6%, both on pace to snap a two-day losing streak.
Pushing inflation higher in February was a sharp climb in gas prices and the continued steady rise in shelter costs. Combined, those two categories were responsible for 60% of the monthly increase, the BLS said.
That monthly pace was right in line with the 0.4% increase that economists were expecting, according to FactSet consensus estimates.
Excluding gas and food prices, categories that tend to be more volatile, “core” inflation rose 0.4% from the month before, bringing its annual rate to 3.8%, a slowdown from 3.9% in January.
Food prices were flat
Outside of gasoline (up 3.8%) and related fuel and energy costs, some of the categories that saw the biggest price spikes included girls’ apparel (up 6.8%); eggs (up 5.8%); and airline fares (up 3.6%). Prices dropped for dairy products and hospital services (both down 0.6%); and fruits and vegetables (down 0.2%).
Still, there was some good news for Americans: For the first time since April 2023, overall food prices did not rise. Grocery prices held flat, while “food away from home” (restaurants) ticked up last month by just 0.1%.
On an annual basis, overall food price inflation slowed to 2.2%, the lowest rate since May 2021. It is now edging even closer to pre-pandemic norms.
Shelter inflation eased to 0.4% from the month before, after spiking by 0.6% in January. Annually, shelter prices are up 5.7%.
This is a developing story and will be updated.
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