The prices for goods and services were less than expected in February, and offered some lighting because consumers and companies are concerned about the imminent impact rates on inflation, the Bureau of Labor Statistics reported Wednesday.
The consumer price index, a broad degree of costs in the US economy, applied a seasonal adapted 0.2% for the month, as a result of which the annual inflation was set at 2.8%, according to the agency of Labor Department. The Al-Item CPI had risen by 0.5% in January.
Excluding food and energy prices, the CPI core also rose by 0.2% on the month and was 3.1% on 12 months, the lowest reading since April 2021. The CPI core had risen 0.4% in January.
Economists examined by Dow Jones were looking for 0.3% increases on both heads and core, with respective annual rates of 2.9% and 3.2%, which means that all rates were 0.1 percentage points less than expected.
Beurs market indexes were mixed after the release after they initially went higher. Reasury delivers Rose. Markets have been very volatile because the industrial average of Dow Jones has fallen 6% in the past month.
“Many of these inflation data do not include what is coming and what has already happened for rates,” said Kevin Gordon, Senor Investment Strategist at Charles Schwab. “The grilling and uncertainties related to policy are still a much stronger power in the market than everything that CPI-related or in terms of one data point.”
The shelters have risen 0.3%, less than in January, but still responsible for about half of the monthly increase in the CPI, the BLS said. The annual increase of 4.2% was the smallest since December 2021. The category makes more than a third of the total weighting in the CPI, with a special focus on a measure in some homeowners that they could get rent for their properties, which also increased 0.3%.
Food and energy indexes both increased by 0.2%. The vehicle prices used increased 0.9% and the clothing rose by 0.6%. Within food, egg prices rose another 10.4%, with the increase from 12 months to 58.8% and a wider measure that also includes meat, poultry and fish by 7.7% on the year. The beef prices also climbed 2.4% in February.
Motor vehicle insurance recorded an increase of 0.3% compared to the month and rose by 11.1% annually. Airline rates, however, fell 4% in February and fell by 0.7% of a year ago.
Inflation-corrected average income per hour rose by 0.1% for the month and rose 1.2% compared to a year ago, the BLS said in a separate release.
“The interpretation of the market is suitable. We still know nothing about how inflation will work with the new tariff regime,” says Thomas Simons, Chief US Economist at Jefferies. “For now, the momentum moves in favor of the Fed.”
The report comes to a potentially critical moment for the American economy and the financial markets, which have recently been shaken if President Donald Trump escalates a trade war and the increase in anxiety.
In the latest developments, the 25% Trump tasks on Staal and Aluminum in force came into effect on Wednesday, which encouraged retaliation measures from the European Union. Trump has also made 20% levies on goods from China.
“Today's CPI report shows that inflation is decreasing and the economy is moving in the right direction under President Trump,” said Karoline Leavitt, Minister for the White House Minister, in a statement. “This inflation report, just like last week's job report, is much better than the media predicted and the so -called 'experts' expected.”
Federal Reserve officials also keep a close eye on developments. Policy makers of the Central Bank generally consider rates as a modest influence on inflation and are often seen as one -off measures that have no permanent impact on the meters in the longer term.
However, a broader trade war could change that if the pace of increases in the economy is more ingrained. Markets currently expect that the FED will resume interest rates in June, with a total of 0.75 percentage point in reductions by the end of 2025.
“The CPI release of February showed further signs of improvement in the field of underlying inflation, with the pace of price increases that are fashionable after the strong release of January,” said Kay Haigh, co-head of fixed-income and liquidity solutions at Goldman Sachs Asset Management. “Although the FED will probably still be on hold during the meeting of this month, the combination of relieving inflatoid pressure and increasing the downward risks for growth that the FED will get closer to the continuation of its reducing cycle.”
The FED will meet next week and is generally expected to have his most important loan interest in a target range between 4.25%-4.5%.
Economic growth is negative in the first quarter, according to the GDPNow tracker of incoming data from the Atlanta Fed. The measure has linked the Q1 growth to a decrease of 2.4%, which would be the first negative growth party in three years.
