Inflation in the United States eased slightly more than expected in February, with consumer prices rising 2.8% annually, according to the latest report from the Bureau of Labor Statistics (BLS).
The slowdown provides some relief to consumers and businesses facing potential inflationary pressures from trade tariffs.
The Consumer Price Index (CPI) rose 0.2% in February, coming in below the 0.3% forecasted by economists. On an annual basis, the headline inflation rate stood at 2.8%, slightly lower than the expected 2.9%.
Core inflation, which excludes food and energy prices, also increased 0.2% from the previous month, bringing the annual core CPI to 3.1%, its lowest level since April 2021.
Shelter costs, which make up a significant portion of the CPI, increased by 0.3% in February, contributing to nearly half of the overall monthly rise.
However, the annual increase of 4.2% was the lowest recorded since December 2021.
Food and energy prices both climbed by 0.2% during the month.
Among specific categories, used vehicle prices saw a notable jump of 0.9%, while apparel costs rose by 0.6%. Egg prices soared by 10.4%, marking a staggering 58.8% increase year-over-year, while beef prices advanced 2.4%. Motor vehicle insurance edged up 0.3%, while airline fares declined by 4% in February and were down 0.7% compared to the previous year.
Inflation-adjusted average hourly earnings rose by 0.1% for the month and were up 1.2% year-over-year.
Following the CPI release, U.S. stock markets showed mixed performance. Initially, major benchmarks moved higher but later lost momentum, while Treasury yields increased as investors reassessed the Federal Reserve’s interest rate trajectory.
The Federal Reserve is closely monitoring inflation and broader economic developments, with markets currently anticipating interest rate cuts to begin in June. Investors expect a total of 75 basis points in rate reductions by the end of 2025.
White House press secretary Karoline Leavitt stated that “inflation is declining and the economy is moving in the right direction under President Trump”.
However, trade tensions remain a concern, with President Donald Trump’s 25% tariffs on steel and aluminum taking effect, prompting retaliatory measures from the European Union. Additionally, Chinese exports to the U.S. are now facing 20% levies.
