Inflation moderated again in February thanks to a decline in energy costs, but other prices marched higher last month, continuing to squeeze Americans’ pocketbooks.
The Labor Department said Tuesday that the consumer price index, a broad measure of the price for everyday goods including gasoline, groceries and rents, rose 0.4% in February from the previous month. Prices climbed 6% annually.
It marked the slowest annual inflation rate since September 2021, although inflation remains about three times higher than the pre-pandemic average.
“The headline numbers were in line with expectations, but you still have persistent high inflation and double-digit [growth] in key areas like food and electricity,” said Sean Snaith, an economist at the University of Central Florida. “These are big shares of consumers’ budgets still rising every month at a pretty rapid pace.”
Here is a breakdown of where Americans are seeing prices rise the fastest – and where there has been some reprieve from higher inflation – as they continue to wrestle with the worst sticker shock in a generation:
Food has been one of the most visceral reminders of red-hot inflation for Americans, with grocery prices climbing 0.4% over the month, according to the unadjusted figures. On an annual basis, food prices have soared 10.2%.
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Consumers paid more for a number of everyday staples in February, with the price rising for bread (1.2%), beef and veal (0.3%), pork (0.6%), ham (3.8%), coffee (0.3%), juice (1.4%), fresh fruits (0.8%), including apples (1%), bananas (1.7%) and citrus fruits (1.1%).
However, there were also some substantial declines: The cost of eggs – which recently surged amid an outbreak of the avian flu, a highly contagious virus that often proves fatal for chickens – tumbled 6.7% in February./
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Shelter costs, which account for about 40% of the core inflation increase, rose 0.8% for the month and 8.1% over the past year. Rent costs jumped 0.8% over the month and 8.2% on a 12-month basis.
Rising rents are a concerning development because higher housing costs most directly and acutely affect household budgets. Another data point that measures how much homeowners would pay in equivalent rent if they had not bought their home also climbed 0.8% from the previous month.
However, experts noted that the Labor Department captures developments in shelter costs and market rents with a big lag. The latest data included in the February report likely reflects the hot housing market mid-022.
“February CPI data was a mixed bag, but the rise in core inflation shows we’re stuck on a plateau for now,” said Robert Frick, a corporate economist with Navy Federal Credit Union. “Inflation should start moving strongly lower this spring and summer, especially as lower rent costs work themselves into the numbers.”
Americans saw some further reprieve last month in the form of lower energy costs, which fell 0.6% in February. That included a 5.2% drop in fuel oil. However, gas prices marched higher in February, climbing 1.7% over the course of the month. Compared to one year ago, the cost of gasoline is down about 2%.
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The average price for a gallon of regular gas was $3.46 nationwide on Tuesday, according to AAA. That marks a major drop from the record high of $5.01 set in mid-June and is down from one year ago when prices hovered around $4.32.
The cost of electricity rose 0.1% in February and is up 12.9% from the same time one year ago.
There was some good news for Americans looking to buy a used car in February.
Used car and truck prices, which have been a major component of the inflation increase, tumbled 1.4% over the month, for a 12-month decline of 13.6%
However, the cost of new cars inched higher last month, rising 0.3% for the month. From the previous year, new cars are up 6.3%.
Travel and transportation
Airline fares surged again in February, with prices up 6.3% from the previous month. Tickets are up about 26.5% over the past year, according to unadjusted data.
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