CPI inflation data cooled in February, leaving investors worried about the health of the U.S. economy
The February Consumer Price Index (CPI) report showed inflationary pressures in February eased concerns about the health of the U.S. economy in the weeks ahead.
Latest data from the Bureau of Labor Statistics shows that the Consumer Price Index (CPI) rose 2.8% from 2.8% in the previous year, down from January’s annual gains of 3%, and ahead of the annual growth expected by economists 2.9%.
The index grew 0.2% from last month, down 0.5% in January compared to the 0.3% increase in economists per month.
On the “core” basis, the volatility cost of depriving food and gas is higher, with prices in February up 0.2% from the previous month, down 0.4% from January’s monthly increase and 3.1% lower than last year’s price compared to January, the lowest annual growth of CORE CPI since April 2021.
This also marks a low price increase in core prices last month at 3.3% and is estimated by the Bloomberg consensus.
Read more: $6 Eggs and Other Inflation Pain Points: Here’s Where Prices Go
Both the title and Core CPI have shown a decline in price growth since July.
“Today’s inflation report brings some much-needed relief to the stock market, avoiding direct concerns about stagnation and providing the Fed with lower policy rates in the coming months if economic data continues to deteriorate,” said Seema Shah, chief global strategist for major asset management.
“Of course, with the huge increase in policy uncertainty about emotions, retail companies are starting to warn around consumer spending, and the recession issue has attracted attention, so it is very likely that what the Fed has proposed needs to play relatively quickly.”
Core inflation has been stubbornly increasing due to the sticky costs of services such as shelter and insurance and medical services. But shelters do show further signs of relief in February, up 4.2% per year, the smallest 12-month increase since December 2021.
On a one-month basis, the shelter index increased by 0.3%, compared with a 0.4% increase in January. Similarly, the index of rent and owners’ equivalent rent (OER) each rose 0.3% during the last month. The equivalent rent for the owner is the assumed rent that the homeowner will pay for the same property.
“Household inflation has historically been the highest in inflation,” said Gargi Chaudhuri, chief investment and portfolio strategist at Blackrock in a note to clients. “Household inflation is the most expensive,” he wrote. “The latest trends in housing prices have made us optimistic about the future trajectory of inflation.”
