Mar 12, 2024 - Economy

Consumer Price Index comes in hot for second straight month

grocery shopper

Photo: Scott Olson/Getty Images

The Consumer Price Index rose 0.4% in February, while the core measure that excludes food and energy prices increased by the same amount, the government said on Tuesday.

Why it matters: While inflation has plunged from its peak, the latest data shows that price increases, including for housing and insurance, remain difficult to stamp out.

By the numbers: The February figures show monthly gains sped up from the 0.3% index increase the prior month as gasoline prices spiked.

  • Core CPI, which economists see as a key gauge of underlying inflation, also rose 0.4% in January — reflecting an increase from more mild increases in late 2023.
  • In the 12 months through February, overall inflation was 3.2%, compared to the 3.1% as of January. Core CPI was 3.8%, versus the 3.9% the prior month—the lowest since 2021.

Catch up quick: The numbers follow a similarly hot report in January that stoked fears that getting inflation back to pre-pandemic norms might be bumpy.

  • The data is particularly key for the Federal Reserve, which has signaled it will cut interest rates at some point this year, though policymakers say they want more proof that inflation is truly receding.
  • "We're waiting to become more confident that inflation is moving sustainably at 2%," Fed chair Jerome Powell told lawmakers last week. "When we do get that confidence, and we're not far from it, it'll be appropriate to begin to dial back the level of restriction."

What to watch: The data is also being closely watched by the Biden administration, which is hoping to tout its economic accomplishments ahead of the 2024 election.

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