An inflation gauge closely watched by the Federal Reserve remained high last month even before the impact of most tariffs has been felt. Americans’ spending rebounded in February after a steep fall last month and incomes increased.
Friday’s report from the Commerce Department shows consumer prices increased 2.5% in February from a year earlier, matching January’s annual pace. Excluding the volatile food and energy categories, core prices rose 2.8% compared with a year ago, higher than January’s figure of 2.7%.
Economists watch core prices because they are typically a better guide of where inflation is headed. The core index has barely changed in the past year.
Inflation remains a top economic concern for most Americans, even as it has fallen sharply from its 2022 peak. Donald Trump rode dissatisfaction with higher prices to the presidency and promised to quickly bring down inflation, but the yearly rate is higher now than in September, when it briefly touched 2.1%.
