The Bureau of Labor Statistics (BLS) reported that the consumer price index (CPI) rose by 0.4% last month, following a 0.3% increase in January. Gasoline and shelter, which includes rents, accounted for over 60% of the monthly CPI increase.
Over the 12 months through February, the CPI increased by 3.2%, up from a 3.1% rise in January.
Economists surveyed by Reuters had predicted a 0.4% increase in the CPI for the month and a 3.1% increase year-on-year. While the annual increase in consumer prices has eased from its peak of 9.1% in June 2022, progress has slowed in recent months.
Inflation accelerated in January, largely attributed to price hikes by service providers at the start of the year, which economists believe were not fully accounted for by the government's seasonal adjustment model.
There was also a notable increase in owners' equivalent rent (OER), a measure of the amount homeowners would pay to rent or would earn from renting their property, which diverged from actual rents. This was partly due to methodological changes by the government.
"We are likely to see OER inflation surpass rent inflation more frequently going forward," said Stephen Juneau, an economist at Bank of America Securities in New York.
"However, we believe much of the 20 basis points difference was due to noise rather than a signal. Rent and OER inflation are expected to continue moderating throughout this year, helping to reduce core inflation as deflation in goods prices fades."
Job growth accelerated, but unemployment also increased. Excluding food and energy, the core CPI increased by 0.4% last month, matching January's increase. Over the 12 months through February, the core CPI rose by 3.8%, the smallest year-on-year increase since May 2021, following a 3.9% rise in January.
