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US Inflation Cooled in February as Predicted


Inflation in the United States cooled in February, according to the latest data from the U.S. Bureau of Labor Statistics (BLS). The Consumer Price Index (CPI) rose 6% in February, less than January’s year-over-year change of 6.4%.

The report was as anticipated.[0] Prior to the announcement of the February CPI report, economists anticipated that headline inflation would ascend by 6% and core inflation would go up by 5.5% in comparison to the same period one year ago. It was anticipated that prices would increase by 0.4% from January to February.[1]

The BLS reports that shelter prices accounted for 70% of the monthly gain in February, making it the largest contributor.[2] The cost of shelter increased by 0.8% from the previous month and 8.1% since the same time[3]

The Federal Reserve, which is closely monitoring Services inflation as a measure of the “sticky” of inflation, saw a 0.1 percentage point increase to 0.8% in this area for the month. The year-over-year increase is[3]

In February, inflation remained at an alarming rate, albeit a slight decrease from the highest point seen in 2022.[4] In February 2022, the core Consumer Price Index (CPI) — not including volatile food and energy prices — jumped 5.5% from the same month in the previous year.[5] Economists surveyed predicted a slight decrease in growth, from 5.6% to 5.5%.[6]

In the past few months, the cost of services has been a bigger factor in overall inflation, even though year-over-year inflation is nearing the Federal Reserve’s target rate of 2%. The central bank is keeping a close eye on what is known as supercore inflation.

In order to try to prevent a wider impact, the Federal Reserve, the Treasury, and the Federal Deposit Insurance Corporation all got involved when Silicon Valley Bank, Signature Bank, and Silvergate failed.

However, that decision might be complicated by the collapse of Silicon Valley Bank and Signature Bank, which forced the Fed to step in with emergency measures to backstop the banking system.

Predictions indicated a twelve-month headline inflation rate of 6%, a decrease from the 6.4% seen in January.

Banks have differing views on what actions the Federal Reserve may take.[7] According to Goldman Sachs, the Federal Reserve will not increase rates, whereas Bank of America, EY, and Oxford Economics are reportedly expecting the central bank to boost rates by 0.25 percent.[8]

0. “Inflation rose 6% in February as Fed mulls more rate hikes amid bank chaos” New York Post , 14 Mar. 2023, https://nypost.com/2023/03/14/inflation-rose-6-in-february-as-fed-mulls-more-rate-hikes

1. “Footwear Prices Were Up 0.8% in February, the Slowest Growth in 23 Months” Yahoo Life, 14 Mar. 2023, https://www.yahoo.com/lifestyle/footwear-prices-were-0-8-153015604.html

2. “Breaking News: Headline US Inflation Drops to 6%, US Dollar Undecided” DailyFX, 14 Mar. 2023, https://www.dailyfx.com/news/breaking-news-headline-us-inflation-drops-to-6-us-dollar-undecided-20230314.html

3. “Inflation fell for the eighth straight month in February” The Mercury News, 14 Mar. 2023, https://www.mercurynews.com/2023/03/14/inflation-fell-for-the-eighth-straight-month-in-february/

4. “Inflation rose 0.4% in February as prices remain stubbornly high” Fox Business, 14 Mar. 2023, https://www.foxbusiness.com/economy/inflation-rose-february-prices-remain-stubbornly-high

5. “CPI Inflation Rate Still Pretty Hot, But Fed May Pause” Investor’s Business Daily, 14 Mar. 2023, https://www.investors.com/news/economy/cpi-inflation-rate-still-pretty-hot-but-fed-may-pause-sp-500-futures-rise/

6. “US CPI rose 6.0% in February, per the Bureau of Labor Statistics” Business Insider, 14 Mar. 2023, https://www.businessinsider.com/inflation-price-growth-us-cpi-february-2023-3

7. “What Inflation Data Means for the Economy After SBV Collapse” Newsweek, 14 Mar. 2023, https://www.newsweek.com/inflation-sbv-data-economy-collapse-finance-1787619

8. “Inflation Fell To 6% In February—But Some Experts Fear Banking Crisis Could Make Prices Worse” Forbes, 14 Mar. 2023, https://www.forbes.com/sites/jonathanponciano/2023/03/14/inflation-fell-to-6-in-february-but-some-experts-fear-banking-crisis-could-make-prices-worse

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