- The inflation rate was 3.2% in February, as measured by the consumer price index.
- That year-over-year increase was greater than the 3.1% increase in January.
- The CPI also increased 0.4% month over month.
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Data from the Consumer Price Index released by the Bureau of Labor Statistics on Tuesday showed inflation, by this measure, unexpectedly accelerated slightly in February.
After starting 2024 with an inflation rate of 3.1% in January, the year-over-year CPI percent change was 3.2% in February. The forecast was 3.1%.
“The CPI has come in hotter than expected, and that’s disappointing,” Mark Hamrick, a senior economic analyst for Bankrate, told Business Insider. “It’s disappointing because Americans want to be relieved of the burden of ongoing inflation.”
Hamrick noted that with Tuesday’s report, the CPI had increased about 20% from February 2020.
The CPI increased 0.4% from the preceding month, higher than the previous month-over-month increase of 0.3%. That’s also the same as the expected increase of 0.4%.
The core CPI, which excludes volatile food and energy prices, increased 3.8% year over year in February after a 3.9% increase in January. The forecast for February’s year-over-year increase was 3.7%.
The core CPI increased only 0.4% from January to February, matching the previous surge of 0.4%. The forecast for this increase was 0.3%.
The food index slowed from a year-over-year increase of 2.6% in January to an increase of just 2.2% in February. The food index didn’t see a month-over-month change after a 0.4% increase in January. While the food-at-home index also didn’t see a change from January to February, the food-away-from-home index ticked up 0.1% after increasing by 0.5%.
The energy index saw another year-over-year decline, 1.9% in February following a drop of 4.6%. This index rose 2.3% month over month after several months of declines. The index for gas saw a 3.8% increase in February from the preceding month after a decline of 3.3% previously. This index also saw a 3.9% decline for the 12 months ending in February.
The shelter index cooled from a year-over-year increase of 6% in January to 5.7% in February. It’s still far beyond the rate from before the pandemic.
“The shelter index increased 0.4 percent in February and was the largest factor in the monthly increase in the index for all items less food and energy,” Tuesday’s news release from the BLS said. “The index for rent rose 0.5 percent over the month, while the index for owners’ equivalent rent increased 0.4 percent.”
On Friday, the Bureau of Labor Statistics released data about the job market in February. The US unemployment rate increased to 3.9%, or the highest unemployment rate in two years. Still, the rate is relatively low, and Indeed’s Nick Bunker told BI it could be the same case as last year, “where it rose but then came back down.”
Friday’s data release also showed average hourly earnings increased from $33.15 an hour in February 2023 to $34.57 an hour this past February. That 4.3% rise is just below the 4.4% rise in January and still low compared with the large year-over-year increases seen in 2022.
When asked whether inflation as measured by the CPI would continue to be elevated this year or whether it would get closer to 2%, Hamrick said “clearly it’s bumpy.”
“The Fed still has restrictive monetary policy in place,” Hamrick added. “We are seeing some moderation in the job market, including with wage growth, including with hiring, and including rising unemployment. Those things ought to produce some weakening in pricing power. The other part is that consumers are also toiling under the weight of these influences, including high interest rates.”
