U.S. Consumers Get Inflation Relief As Consumer Prices Rise Less Than Expected

By John Carney (Breitbart)

Americans got relief from inflation in February as prices rose at the slowest pace since last summer.

Consumer prices rose 2.8 percent in the 12 months through February, the Labor Department reported Wednesday, slower than the three percent year-over-year increase recorded in January. Economists had forecast the consumer price index (CPI) would be up 2.9 percent versus a year ago.

Core CPI, which excludes volatile food and energy prices, rose 3.1 percent compared with a year earlier. This was a smaller annual increase than consumers faced in January, when core prices were up 3.3 percent. Economists had forecast a 3.2 percent rise.

The monthly pace of price increases slowed significantly in February. Overall consumer prices climbed just 0.21 percent, the smallest increase since August 2024. In January, prices jumped 0.5 percent compared with December. Core prices also rose 0.2 percent, half of January’s 0.4 percent surge.

“The Trump administration has scored a major victory in the inflation battle, with prices in February rising at less than half their elevated rate in January. By unleashing American energy and cutting wasteful spending, the Trump administration is already succeeding in reducing the persistent upward pressure on prices caused by bad Biden administration policies,” said Alfredo Ortiz, CEO of Job Creators Network.

Rising home prices and rents was a major contributor to inflation in February. The index for shelter rose 0.3 percent in the month and accounted for nearly half of the overall monthly increase, the Labor Department said.

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Two of the most politically sensitive and economically salient areas of the economy brought consumers significant relief from inflation. The index for grocery prices—described as “food at home” by the Labor Department—did not rise at all. Gasoline prices fell by one percent.

The better-than-expected inflation report indicates that economists likely overestimated the effect the threat of tariffs would have on prices. Many Wall Street economists expected consumers to buy more goods ahead of tariffs, ironically driving up prices in an attempt to avoid future price increases. There’s little evidence to support this in the February price data.

The prices of new cars fell 0.1 percent in January and are down 0.3 percent for the year. Used car and truck prices, which jumped 2.2 percent in January, rose by another 0.9 percent in February.

Despite overall flat grocery store prices, egg prices rose again in February, climbing 10.4 percent. The drove the i.6 ncrease in the basket that also includes meats, poultry, fish.

Goods prices rose 0.1 percent, down from 0.4 percent in January. Services prices rose 0.3 percent, versus 0.5 percent a month earlier. Core goods prices, another measure that excludes food and energy prices, rose 0.3 percent. Prices for core services, which excludes energy services, rose 0.5 percent.

Prices of durable goods, a category that might be expected to be affected by the expectation of tariffs, surprisingly fell 0.1 percent in February. In January they were up 0.4 percent.

The better-than-expected inflation data is likely to provide some relief to the Federal Reserve, suggesting that prices are headed in the right direction. The Fed cut rates three times at the tail-end of the Biden administration, including a super-sized 75 basis point cut several weeks before the election, believing that the labor market was in danger of weakening and inflation was headed toward its two percent target. In the months that followed, however, the labor market proved stronger than expected and inflation heated up.