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Economy in Brief

U.S. Consumer Price Inflation Firms in February; Core Prices Tame
by Tom Moeller  March 10, 2021

• Energy prices again are strong.

• Services prices heat up.

• Core goods prices decline.

The Consumer Price Index rose 0.4% (1.7% y/y) during February following an unrevised 0.3% January increase. The gain matched expectations in the Action Economics Forecast Survey. The CPI excluding food & energy edged 0.1% higher last month (1.3% y/y) after holding steady for two straight months. A 0.2% February gain had been expected.

Strong energy prices provided much of the lift to last month's increase with a 3.9% jump (2.4% y/y), following January's 3.5% rise. Gasoline prices surged 6.4% (1.5% y/y), strong for the third straight month. Natural gas prices strengthened 1.6% (6.7% y/y). Fuel oil prices surged 9.9% NSA (-0.5% y/y) following a 5.4% jump while the cost of electricity improved 0.7% (2.3% y/y) after easing 0.2% in January.

Food prices improved 0.2% (3.6% y/y) last month, after rising 0.1% in January. Food-at-home prices rose 0.3% (3.5% y/y). Dairy prices fell 0.2% (2.7% y/y), off for a second straight month, while cereal & bakery product costs rose 0.5% (2.7% y/y). Fruit & vegetable prices rose 0.7% (3.4% y/y) after falling 0.2% in each of the prior two months. Meat, poultry & fish prices rose 0.2% (5.3% y/y) while egg prices strengthened 2.2% (4.3% y/y). Nonalchoholic beverage prices eased 0.1% (+4.0% y/y). Prices for food away-from-home rose 0.1% NSA (3.7% y/y).

Goods prices excluding food & energy edged 0.2% lower (+1.3% y/y) in February after rising 0.1% for two straight months. Apparel prices fell 0.7% (-3.6% y/y) following three months of firm increase. Also declining were prices for education & communication goods which fell 0.2% (-2.7% y/y), off for a second month. New vehicle prices held steady (1.2% y/y). Used car & truck prices fell 0.9% for the third straight month, but they were 9.3% higher y/y. Medical care product costs were off 0.7% (-2.5% y/y), the sixth straight monthly decline. Household furnishings prices weakened 0.1% last month (+2.3% y/y). To the upside, household appliance prices jumped 1.9% (7.2% y/y) and recovered January's shortfall. Recreation product prices improved 0.5% (0.3% y/y) as sporting goods prices jumped 1.5% (4.6% y/y).

Services prices rose 0.2% (1.3% y/y) during February after holding steady for two months. Shelter costs rose 0.2% after six straight months of stability. The 1.5% y/y gain was half the 2019 increase. The owners' equivalent rent of primary residences increased 0.3% and rose a greatly lessened 2.0% y/y. Education & communication services prices improved 0.1% (2.1% y/y). Recreation services prices strengthened 0.6% (1.1% y/y) after two months of decline. Medical care services prices improved 0.5% (3.0% y/y) for a second straight month. These gains came after three straight months of decline. The cost of public transportation fell 2.3% (-16.2% y/y).

The Consumer Price Index data can be found in Haver's USECON database with additional detail in CPIDATA. The Action Economics survey figure is in the AS1REPNA database.

Consumer Price Index, All Urban Consumers (% chg) Feb Jan Dec Feb Y/Y 2020 2019 2018
Total 0.4 0.3 0.2 1.7 1.2 1.8 2.4
Total less Food & Energy 0.1 0.0 0.0 1.3 1.7 2.2 2.1
  Goods less Food & Energy -0.2 0.1 0.1 1.3 0.1 0.2 -0.2
  Services less Energy 0.2 0.0 0.0 1.3 2.2 2.8 2.9
 Food 0.2 0.1 0.3 3.6 3.4 1.9 1.4
 Energy 3.9 3.5 2.6 2.4 -8.5 -2.1 7.5
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