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CPI: Modest Increase in February, In-Line with Expectations

March 15, 2017
Bottom Line: Consumer prices are now 2.8% higher over the last 12 months as base effects from energy bottoming almost exactly a year ago continue to impact headline figures. Gasoline prices are up nearly 31% from a year ago. Recognizing the transitory nature of energy on headline, core CPI moderated just a touch in February with declines in car prices and medical care offset by the steady increase in housing costs. Owners' equivalent rent, the largest component of core, continues to rise at about 3.5% per annum. Overall inflationary pressures at the consumer level are rising. But base effects suggest the acceleration seen in the last few months should start to moderate.

The CPI ROSE by 0.1% in February, compared with market expectations for no change of 0.0%.

  • Food prices increased by 0.2% while energy prices fell by 1.0%.
  • Prices for gasoline fell by 3.0% while prices for fuel oil declined by 0.5%, prices for electricity climbed by 0.8%, and prices for natural gas rose by 1.5%.
  • Energy prices are now 15.6% ABOVE their year ago level.
  • Overall consumer prices are now 2.8% ABOVE their year ago level; in February 2016, consumer prices were 1.0% ABOVE their year ago level.

The Core CPI ROSE by 0.2%, compared with market expectations for an increase of 0.2%.

  • Prices for commodities excluding food and energy commodities fell by 0.0%.
  • Gains in apparel (+0.6%), tobacco (+0.4%), were offset by declines in used cars & trucks (-0.6%), new vehicles (-0.2%).
  • Prices for services excluding energy services rose 0.3% with moderate increase in transportation (+0.7%), shelter (+0.3%), and owner's equivalent rent (+0.3%).

  • Core consumer prices are now 2.2% ABOVE their year ago level; in February 2016, consumer prices were 2.3% ABOVE their year ago level.