Consumer price growth came in slightly hotter than expected for the second month of the year, according to the latest data from the Bureau of Labor Statistics.
- M-O-M: The Consumer Price Index for All Urban Consumers rose 0.4% in February, up from the 0.3% rise in January and the biggest monthly increase since August 2023.
- Y-O-Y: The yearly index rose to 3.2% in February, up from 3.1% in January and inline with the variance we have seen these last five months.
Swing & A Miss. Economists predicted a smaller increase of 0.3% in February which they expected to slow the annual index to
Food Unchanged. The Food index was unchanged in February, down from a 0.4% rise in January the first flat month since November 2023.
- The annual index slowed to 2.2% in February, down from 2.6% in January and the lowest level since May 2021.
Energy Up. The energy index rose 2.3% in February, up from the 0.9% decline in January and the biggest monthly jump since August 2023.
- The annual index is still in negative territory with prices down 1.9% from one year ago, up from the 4.6% decline reported in January and the highest level since September 2023.
- Gasoline prices jumped 3.8% in February after four months of declines. It was the biggest monthly jump since August 2023.
Core. The core index rose 0.4% in February, the same increase as last month and is the highest increase since April 2023. The yearly index slowed to 3.8% in February, down from 3.9% in January and the lowest level since May 2021.
- The shelter index increased 0.4% in February, down from the 0.6% rise in January and the same increase we saw in December and November.
- Shelter costs annual index slowed to 5.7% in February, down from 6.0% in January and the lowest level since July 2022. NOTE: Shelter costs continue to be the largest factor in the monthly increase.
BOTTOM LINE: Despite many annual indexes falling to 2-3 year lows, this was a disappointing report. A 0.4% monthly rise is a 4.8% annualized rate that is way too hot and should cool any thoughts anyone had about a rate cut happening before June.
