US inflation up again in February in latest sign that price pressures remain elevated

WASHINGTON — Consumer prices in the United States picked up last month, a sign that inflation remains a persistent challenge for the Federal Reserve and for President Joe Biden’s re-election campaign, both of which are counting on a steady easing of price pressures this year.

Prices rose 0.4% from January to February, higher than the previous month’s figure of 0.3%, the Labor Department said on Tuesday. Compared with a year earlier, consumer prices rose 3.2% last month, above January’s 3.1% annual pace.

Excluding volatile food and energy prices, so-called “core” prices also climbed 0.4% from January to February, matching the previous month’s rise and a faster pace than is consistent with the Fed’s 2% inflation target. Core inflation is watched especially closely because it typically provides a better read of where inflation is likely headed.

“It’s a disappointment, but not a disaster,” said Eric Winograd, U.S. economist at asset manager AB. “The underlying details are more encouraging than the top-line number, which was boosted by a few volatile categories — the type of prices that tend not to repeat month-to-month.”

Those volatile items include gas prices, which jumped 3.8% just from January to February but are still below their level of a year ago. Air fares surged 3.6% after two months of much-smaller increases. Clothing prices rose 0.6% after three months of declines but are unchanged compared with a year earlier.

In the metropolitan area, consumer prices rose 2.9% last month compared with February 2023 on the higher cost of housing and recreation, said William J. Sibley, regional commissioner for the federal Bureau of Labor Statistics, which produces the consumer price index.

He said prices climbed 3.1% in January, year over year, in the 25-county region that includes Long Island.

Last month, residential rent and recreation increased 4.8% and 3.6%, respectively, year over year.

These price rises were partially offset by declines in the cost of groceries and gasoline. Grocery prices fell 0.1% in February compared with a year ago, with the largest drops in meat, poultry, fish, eggs, fruits and vegetables. Gas prices decreased 4.5%.

Most economists expect inflation to continue slowly declining this year. At the same time, the uptick last month may underscore the Fed’s cautious approach toward interest rate cuts.

Overall inflation has plummeted from a peak of 9.1% in June 2022, though it’s now easing more slowly than it did last spring and summer. The prices of some goods, from appliances to furniture to used cars, are actually falling after clogged supply chains during the pandemic had sent prices soaring higher.

By contrast, prices for dental care, car repairs, and other services are still rising faster than they did before the pandemic. Car insurance has shot higher, reflecting rising costs for repairs and replacement.

Still, Fed Chair Jerome Powell signaled in congressional testimony last week that the central bank is getting closer to cutting rates.

Most economists expect the Fed’s first rate cut to occur in June.

 — with James T. Madore