US inflation slowed last month, with the consumer price index (CPI) increasing by 2.8% in February from a year ago, down from 3% the previous month.
The big picture: Core prices, excluding food and energy categories, rose 3.1% from a year earlier, down from 3.3% in January, marking the lowest level since April 2021.
- Despite the declines in inflation, it remains above the Federal Reserve’s 2% target, and economists expect it to remain elevated as tariffs come into effect.
- Monthly inflation was also lower than expected, with consumer prices rising 0.2% in February from the previous month, down from a 0.5% jump in January. Core prices rose just 0.2%, below the 0.4% increase in January.
Zoom in: Air fares saw a sharp drop, falling 4% in February from the previous month, contributing to the overall decline in inflation. Rental price increases also slowed, and the cost of hotel rooms and car insurance rose much more slowly in February compared to the previous month.
- Grocery prices remained unchanged from January, offering some relief to consumers facing a 25% increase in prices over the past four years. However, egg prices jumped by 10.4% in February from the previous month and are nearly 60% more expensive than a year ago, attributed to the avian flu affecting egg production.
