February’s Cpi Report Reveals Steady Annual Inflation Of 2.4%

U.S. consumer prices increased moderately from January to February, with annualized inflation holding steady, according to data released Wednesday by the U.S. Bureau of Labor Statistics.

The Consumer Price Index rose 2.4% over the 12 months ending in February, unchanged from January. On a seasonally adjusted basis, the index increased 0.3% during the month.

Core inflation, which excludes the more volatile food and energy categories, rose 2.5% during the year, also unchanged from the previous month. The core index increased 0.2% in February after rising 0.3% in January.

“The CPI report was tame as shelter inflation is back to pre COVID-19 levels, but in reality, nobody is putting much weight on these numbers until the Iran conflicts gets resolved because inflation has a backdrop to increase noticeably going out in the future,” HousingWire Lead Analyst Logan Mohtashami said.

First American senior economist Sam Williamson also characterized February’s inflation data as being “on a steady path … with no evidence of renewed momentum.”

“For the Federal Reserve, that steady reading supports holding policy in place near term, while preserving the option to ease later — as long as inflation continues to trend in the right direction,” Williamson said.

He added that the February report marks “the last clean snapshot of inflation before renewed geopolitical tensions and the resulting volatility in energy markets.”

“While these recent developments are likely factors into the Fed’s deliberations over interest rates next week, they are unlikely to alter the broader policy outlook unless higher energy prices begin to feed persistently into underlying core inflation,” Williamson said. “Even so, added uncertainty could reinforce a cautious stance and push out the timing of eventual rate cuts.”

Shelter costs, one of the largest components of the index, rose 0.2% in February. Rents increased 0.1% during the month, marking the smallest monthly increase since January 2021.

“For housing, the key story heading into spring is a stronger foundation than a year ago, not day-to-day geopolitical volatility or swings in oil prices. Mortgage rates may remain choppy in the near term as markets sort through inflation and Fed timing, but a continued easing trend would leave room for rates to drift modestly lower over time,” Williamson said.

He noted that cooling inflation and improved homebuying power are driving improved affordability conditions.

“That shifts attention back to fundamentals — especially new listings activity — which will be critical in determining whether pent‑up demand translates into sustained sales this spring,” he said. “In markets where new listings continue to normalize, conditions are increasingly in place for a healthier rebound, even without a sharp decline in rates.”

Food prices increased 0.4% in February and were up 3.1% over the past year. Grocery prices also rose 0.4% during the month, while the index for food away from home, including restaurant meals, increased 0.3%.

Energy prices rose 0.6% in February after declining 1.5% in January. Gasoline prices increased 0.8% over the month, while natural gas prices rose 3.1%. Electricity prices declined 0.7%. Over the past year, the overall energy index rose 0.5%.

Other categories that posted increases in February included apparel, medical care, airline fares, household furnishings and operations, and education. Meanwhile, indices for communication, used cars and trucks, motor vehicle insurance and personal care declined.

The CPI for All Urban Consumers increased to a reading of 326.785 in February, with the index benchmarked to 100 based on data from 1982 to 1984. Over the past year, the shelter index rose 3%, medical care increased 3.4%, and household furnishings and operations climbed 3.9%.

The CPI for Urban Wage Earners and Clerical Workers increased 2.2% over the past 12 months.