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U.S. inflation slowed last month for the first time since September and a measure of underlying inflation fell to a four-year low, even as additional tariffs on steel and aluminum that kicked in Wednesday threaten to send prices higher.
The consumer price index increased 2.8% in February from a year ago, Wednesday’s report from the Labor Department shows, down from 3% the previous month. Core prices, which exclude the volatile food and energy categories, rose 3.1% from a year earlier, down from 3.3% in January. The core figure is the lowest since April 2021.
The declines were larger than economists expected, according to a survey by data provider FactSet. Yet they remain higher than the Federal Reserve’s 2% target. Sticky inflation could create problems for President Donald Trump, who promised during last year’s campaign to “knock the hell out of inflation.”
Yet on a monthly basis, inflation also came in much lower than expected. Consumer prices rose 0.2% in February from the previous month, down from a big 0.5% jump in January. And core prices rose just 0.2%, below the 0.4% increase in January. Economists watch core prices because they are typically a better guide to inflation’s future path.
Grocery prices were unchanged last month from January, bringing some relief to consumers grappling with a 25% jump in grocery prices from four years ago. The cost of eggs, however, jumped 10.4% in February from the previous month and are nearly 60% more expensive than a year ago.
