[ad_1]
Inflation eased for an eighth straight month in February as a slowing rise in food costs offset a bump in gasoline prices and another spike in rent.
But price increases rose sharply again on a monthly basis, fueling concerns that a steady pullback in inflation at the end of last year has stalled. Used car prices declined for the eighth month in a row.
Consumer prices increased 6% from a year earlier, down from 6.4% in January and a 40-year high of 9.1% in June, according to the Labor Department’s consumer price index.
That marked the smallest annual gain since October 2021.
On a monthly basis, though, prices advanced 0.4% following a 0.5% increase in January. Previously, monthly cost increases had been shrinking.
Protect your assets: Best high-yield savings accounts of 2023
CPI vs. core CPI: What is the difference?
Core prices, which exclude volatile food and energy items and better reflect longer-term trends, increased 0.5% from January following a 0.4% bump the previous two months. That lowered the annual increase from 5.6 to 5.5%.
All else equal, a resurgence of faster inflation might have led the Federal Reserve to approve a half-point interest rate increase next week after gradually moderating the pace of its hikes to a quarter point.
But some top economists say the collapse of Silicon Valley Bank and the risks to the financial system posed by other troubled regional banks could lead the Fed to pause its hiking campaign or lift rates by a quarter point at most.
Despite the rebound in consumer prices, economists still expect inflation to resume its descent in coming months. Goods prices have fallen as supply-chain bottlenecks have improved and rent increases are expected to pull back, based on new leases.
Barclays predicts yearly inflation will slow to 2.9% by December, moderately above the Fed’s 2% target.
Fed Chair Jerome Powell has said he’s most concerned about prices for underlying services, excluding housing, which he says are mostly fueled by pay increases.
When is CPI data released
The Bureau of Labor Statistics will release the CPI report at 8:30 a.m. ET.
Stock futures
Futures trading for the Dow Jones Industrial Average moved higher leading up to the report’s release. The index has been volatile in the aftermath of the Silicon Valley Bank fallout.
10-year Treasury yield
Yields for 10-year Treasury notes are up slightly this morning.
Core CPI
Core CPI is a measure of the change in consumer prices excluding energy and food which are generally the most volatile components of CPI. Economists expect core CPI for February to drop to 5.5% on an annual basis from 5.6% in January.
FRC stock
Shares of First Republic Bank are up nearly 50% in premarket trading. The bank has taken a big hit in recent days as depositors pull money from their accounts.
Expected CPI
Economists surveyed by Bloomberg predict prices rose by 0.4% on a monthly basis for the second consecutive month. On an annual basis, they estimate a 6% rise in prices.
Current inflation rate
The current rate of inflation is 6.4% on annual basis.
Next Fed meeting
The next meeting is scheduled for March 21-22.
NY Fed inflation expectations
Americans think inflation will be at 4.2% a year from now, according to median estimates from the Federal Reserve Bank of New York’s survey on consumer expectations published yesterday. That’s 0.8 percentage points less than the annual rate of inflation Americans predicted last month.
In three years they predict annual inflation will be nearly at the Fed’s 2% target level of inflation.
When is the next inflation report?
The Fed’s preferred measure of inflation, the Personal Consumption Expenditures price index, or PCE, comes out on March 31. The next CPI report is due on April 12.
Average inflation rate last 30 years
Annual inflation over the last 30 years has been 2.3% on average, according to CPI data.
Elisabeth Buchwald is a personal finance and markets correspondent for USA TODAY. You can follow her on Twitter @BuchElisabeth and sign up for our Daily Money newsletter here
[ad_2]
Source link