Inflation Trends Down for the Eighth Straight Month
The annual rate of inflation in February eased for the eighth month in a row and hit its lowest point in 17 months, but consumer price increases are still at multi-decade highs. The Consumer Price Index (CPI) for All Urban Consumers, a measure of price changes commonly referred to as the inflation rate, was up 6% on an annual basis in February 2023, according to the Bureau of Labor Statistics. That matched economists’ expectations and was down from the 6.4% annual increase in January and well below the 9.1% hike in June, which was the biggest year-over-year jump in prices since November 1981. Still, inflation has now remained above the Fed’s 2% target for two years. Excluding volatile food and energy prices, the core CPI increased 5.5% during the year-ending February. Looking at other indexes, the cost of energy was up 5.2% year-over-year, the lowest level in two years. Food prices increased 9.5% over the past year. Shelter, which accounts for about one-third of the total CPI index, saw an 8.1% year-over-year price surge in February, the biggest annual gain in over 40 years. Meanwhile, price increases in airline fares (+26.5%) remain stubbornly high. Contributing to the lower inflation rate, the cost of used cars and trucks plummeted 13.6% over the past year, while gasoline prices were down 2% from a year ago.