MNI BRIEF: US Feb Core CPI Tad Hotter Than Expected
Shelter inflation reaccelerated to 0.8% over the month, accounting for 70% of the rise in headline CPI.
U.S. core CPI inflation added 0.5% in February, a tenth higher than markets expected, as shelter reaccelerated to a stronger-than-forecast 0.8% increase. Headline CPI met expectations, rising 0.4% over the month and 6.0% over the year, the smallest increase since September 2021. Core CPI is up 5.5% from a year ago, the lowest since December 2021.
Shelter contributed to over 70% of the rise in headline CPI, the Bureau of Labor Statistics said Tuesday. Recreation, household furnishings and operations and air fares also increased, while used cars and trucks and medical care both fell over the month. (See: MNI INTERVIEW: Inflation Proves More Persistent - Fed's Garriga)
Core services excluding housing ramped up to 0.50% from 0.36%, the highest since September, according to an MNI calculation. A stronger than expected inflation report, coming on the heels of a robust jobs report, would have added to the case for a 50 bp hike next week, but fears over financial contagion have seen analysts revising their calls to 25 bp or a pause.