CPI Inflation Report February 2025:

Prices for goods and services rose more than expected in February, providing some relief as consumers and businesses worry that the looming influence could have on inflation, the Bureau of Labor Statistics reported Wednesday.

According to the Labor Bureau, the Consumer Price Index, a measure of the broad cost across the US economy, reached 2.8% from the month’s seasonally adjusted 0.2%. All items CPI increased by 0.5% in January.

Excluding food and energy prices, CORE CPI also rose 0.2% a month, at 3.1% over 12 months. Lowest reading since April 2021. Core CPI rose 0.4% in January.

Economists surveyed by Dow Jones were looking for a 0.3% increase in both headlines and cores, with annual rates of 2.9% and 3.2% respectively. This means that all fees are 0.1 percentage points less than expected.

The stock market index was first moved high and then mixed after release. The yield with peace of mind increases. The market has been extremely volatile as the Dow Jones industrial average has slipped 6% in the past month.

“Many of this inflation data doesn’t incorporate what’s coming and what’s already happened due to tariffs,” said Kevin Gordon, Senor investment strategist at Charles Schwab. “Policy-related whims and uncertainties are still much more powerful forces in the market, either in terms of CPI-related or single data points.”

Shelter Coss rose 0.3% less than in January, but is responsible for about half of the monthly increase in CPI, BLS said. The annual increase of 4.2% was the lowest since December 2021. This category accounts for more than a third of CPI’s total weighting, increasing by 0.3%, particularly focusing on measures that estimate homeowners can earn rentals for their properties.

Both food and energy indices increased by 0.2%. Used car prices rose 0.9%, while apparel rose 0.6%. Within the food, egg prices rose another 10.4%, increasing the 12-month increase to 58.8%, pushing a broader scale, with meat, chicken and fish rising by 7.7% over the year. Beef prices also rose 2.4% in February.

Auto insurance increased by 0.3% that month, and increased by 11.1% per year. However, airline fares slipped 4% in February, down 0.7% from a year ago.

Inflation-adjusted average hourly revenues increased by 0.1% that month, up 1.2% from a year ago, BLS said in a separate release.

“The interpretation of the market is appropriate. We don’t know anything yet about how inflation works with the new tariff regime,” said Thomas Simons, chief economist at Jeffries. “For now, at least, momentum is moving in favor of the federal government.”

The report is at a potentially important time for the US economy and financial markets that have been shaken up recently as President Donald Trump is escalating the trade war and fearing fears of growth.

In the latest development, Trump’s 25% mandate on steel and aluminum came into effect Wednesday, prompting retaliation measures from the European Union. Trump also slapped 20% collection on goods from China.

“Today’s CPI report shows that inflation is declining and that the economy is moving in the right direction under President Trump,” White House spokesman Carolyn Leavitt said in a statement. “Like last week’s Jobs report, this inflation report is far superior to the forecasted media and so-called “experts.” ”

Federal Reserve officials are also closely watching development. Central bank policymakers generally believe that tariffs will have a moderate impact on inflation, and are often seen as a one-off measure that does not have a permanent impact on long-term gauges.

However, a broader trade war could change if the pace of economic growth took root. The market currently expects the Fed to resume cut interest rates in June, reducing total 0.75 percentage points by the end of 2025.

“The February CPI release showed further signs of underlying inflation progress, and after a strong release in January, the pace of price increases has eased,” said Kayhey, global co-head of bonds and liquidity solutions at Goldman Sachs Asset Management. “While the Fed is likely still pending at this month’s meeting, the combination of mitigating inflationary pressures and increasing negative risks to growth suggests that the Fed is approaching continuing its mitigation cycle.”

The Fed will be held next week and is widely expected to hold significant borrowing rates within the target range of 4.25%-4.5%.

Economic growth will be negative in the first quarter, according to data received from the Atlanta Federal Government GDPNOW Tracker. This measure will reduce first quarter growth by 2.4%, marking the first negative growth quarter in three years.