Wednesday’s US inflation update from the outfit formerly known as the world’s preeminent statistical organization was mostly (and mercifully) consistent with economists’ expectations.
Underlying price growth in America ran 0.2% in February, the BLS said. The unrounded print was 0.216%, lower than the whisper number.
If you don’t count the widely criticized guesstimates for October and November (when the number-crunching process was hampered by the longest-ever US government shutdown), the unrounded readout was the coolest since May.
On a YoY basis, core CPI rose 2.5% last month, in line with estimates and unchanged from the prior month’s annual pace.
Recall that January’s CPI release was accompanied by a pronounced overshoot on the so-called “supercore” metric the Fed closely monitors for evidence of demand-driven, non-housing services inflation. That measure slowed to reflect a 0.35% increase, not “cool” exactly, but benign relative to the prior month’s 0.6% jump.
Headline CPI printed 0.267% MoM and 2.4% YoY, matching estimates.
The category breakdown suggested the tariffs are being passed along in places. Apparel prices rose 1.3% MoM and 2.5% from the same period a year ago, for example, and the household furnishings index posted the largest YoY advance since early 2023.
The food gauges were a little warm. Grocery prices rose 0.4% MoM, but the annual rate there’s a tolerable 2.4%. The shelter index rose 0.2% for a second month, which is tame. Used vehicle prices posted a third straight MoM decline and fell more than 3% from February of 2025.
Needless to say, this is stale information in the context of the Iran drama. As I put it in this week’s macro preview, “warm readouts would be insult to injury in the context of $100 crude, while benign prints would be dismissed as old news given the data was collected before the war.”
As BMO’s Vail Hartman put it Wednesday, “while it was a broadly benign round of CPI data, it will do little to assuage the prevailing inflationary concerns associated with the run-up in oil and gas prices.”
