Inflation Heats Up in February, as Energy and Shelter Costs Spike

Craig Bannister | March 12, 2024
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The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.4 percent in February – the largest monthly rise since September 2023 – on a seasonally adjusted basis, after rising 0.3 percent in January, the U.S. Bureau of Labor Statistics (BLS) reported Tuesday.

The 12-month increase in prices also intensified in February. Compared to the same month in 2023, the all-items index rose 3.2 percent, higher than last month’s 3.1% January-to-January rise.

Both the monthly and 12-month increases exceeded analysts’ expectations and higher than the Federal Reserve’s two percent rate target rate, which could foreshadow a hike in interest rates.

The energy index was up a seasonally-adjusted 2.3 percent over the month, the largest increase since August of last year, led by a spike in the cost of gasoline. The gasoline index rose 3.8 percent, also the highest increase since August.

The cost of shelter rose 0.4 percent from the previous month, following January’s 0.6 percent monthly increase. Over the last 12 months, the cost of shelter is 5.7 percent higher – second only to the 9.9 percent surge in the cost of transportation services.

Combined, the energy and shelter indexes contributed over sixty percent of the monthly increase in the index for all items.

For the second straight month, the “core” inflation rate (all items less food and energy) rose 0.4 percent in February – matching the largest monthly increase since April 2023 (0.4%).

In February the core index is up 3.8 percent from 12 months earlier.

The 0.4 percent shelter index increase in February was the largest factor in the monthly increase in the index for all items less food and energy. The index for rent rose 0.5 percent over the month, while the index for owners' equivalent rent increased 0.4 percent.

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