• 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.