Inflation slowed more than expected in February, marking the first decline in four months. However, the progress may not last as President Donald Trump intensifies his trade war, which could drive prices higher for American consumers.
According to data from the Bureau of Labor Statistics released Wednesday, the Consumer Price Index (CPI), which tracks price changes in commonly purchased goods and services, stood at 2.8% for the 12 months ended in February, a slowdown from the 3% annual rate recorded in January. On a monthly basis, prices rose 0.2%, compared to 0.5% in January.
Economists had initially anticipated a slowdown in inflation due to falling gas prices and continued disinflation in housing-related costs. FactSet consensus estimates projected prices would rise 0.3% from January and 2.9% annually.
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February’s inflation figures were better than expected, thanks in part to two major reasons: “Grocery prices were flat for the month and gas prices fell.”
Consumers also saw some relief when it came to eggs. “Egg prices, which have soared because an ongoing bout of avian flu is ravaging the industry, rose 10.4% for the month, a cooler reading than the 15.2% increase logged in January.” However, egg prices remain high, “up 58.8% from a year ago.”
Food and fuel are two of the most direct ways consumers experience inflation, but their prices can swing sharply due to external factors such as “weather, war, disease, supply chain snarls, spikes in demand or other temporary shocks.”
For that reason, these categories are excluded from “core” inflation measurements, which provide a clearer view of long-term price trends.
February’s core CPI also slowed, “rising 0.2% for the month (from 0.4% in January) and slowing to 3.1% annually from 3.2%.”
(CNN)
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