US inflation comes in lower than forecast at 2.8% in February
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The news: US consumer prices rose less than anticipated in February, with the consumer price index (CPI) posting its smallest gain since 2021.
The numbers: The CPI rose 0.2%, with core CPI (excludes food and energy) also rising 0.2%. The all items index increased 2.8% year on year.
The figures offer a reprieve after CPI advanced at a sharper 0.5% clip in January.
The context: The Bureau of Labor Statistics said the index for shelter rose 0.3% in February, which accounts for almost half of the monthly all items index increase. The rise for shelter was partially offset by a 4% decrease in airline fares, which fell the most since June last year as airlines warn of weaker demand on the horizon.
Despite the softer figures, investors are expecting that US inflation will creep up again as prices rise on the back of the Trump administration's tariff rollout. While the Federal Reserve is expected to hold rates steady at its meeting next week, concerns about a recession are mounting and could add pressure on The Fed to cut sooner.
The source: Bureau of Labor Statistics
