Consumer prices in the United States picked up last month, a sign that inflation remains a persistent challenge for the Federal Reserve and for President Joe Biden’s reelection campaign, both of which are counting on a steady easing of price pressures this year.
Prices rose 0.4% from January to February, higher than the previous month’s figure of 0.3%, the Labor Department said Tuesday. Compared with a year earlier, consumer prices rose 3.2% last month, above January’s 3.1% annual pace.
Excluding volatile food and energy prices, so-called “core” prices also climbed 0.4% from January to February, matching the previous month’s rise and a faster pace than is consistent with the Fed’s 2% inflation target. Core inflation is watched especially closely because it typically provides a better read of where inflation is likely headed.
“It’s a disappointment, but not a disaster,” said Eric Winograd, U.S. economist at asset manager AB. “The underlying details are more encouraging than the top-line number, which was boosted by a few volatile categories – the type of prices that tend not to repeat month-to-month.”
Those volatile items include gas prices, which jumped 3.8% just from January to February but are still below their level of a year ago. Air fares surged 3.6% after two months of much smaller increases. Clothing prices rose 0.6% after three months of declines but are unchanged compared with a year earlier.
Housing and rental costs, though, which tend to change more slowly, cooled in February: They rose 0.4% from January, slower than the 0.6% increase the previous month. Measures of new apartment leases, which have cooled, will likely feed into the government’s inflation data in the coming months.
New car prices ticked down 0.1% in February. Though these prices remain much higher than they were before the pandemic, they’re expected to decline further as more vehicles show up on dealer lots. Grocery prices were unchanged last month and are up just 1% from a year earlier.
Despite February’s elevated figures, most economists expect inflation to continue slowly declining this year. At the same time, the uptick last month may underscore the Fed’s cautious approach toward interest rate cuts.
Voter perceptions of inflation are sure to occupy a central place in this year’s presidential election. Despite a healthy job market and a record-high stock market, polls show that many Americans blame Biden for the surge in consumer prices that began in 2021. Though inflationary pressures have significantly eased, average prices remain about far above where they stood three years ago.
Read the full report from the Associated Press here.