Eggs are on sale at a grocer in Los Angeles on February 26th, 2025.
Eric Sayer/Bloomberg via Getty Images
Inflation recedes in February against the backdrop of ease of price pressure on consumer staple foods such as gasoline, groceries and housing amid concerns that President Donald Trump’s tariff policies could hinder progress.
The U.S. Bureau of Labor Statistics reported Wednesday that the U.S. Bureau of Labor Statistics saw a 2.8% rise in the consumer price index for the 12 months that closed in February. That’s down from 3% in January.
The slowdown is encouraging after the fears of recent months, inflation has taken hold and not returning to target.
“Progress is bumpy,” said Michael Pagliese, senior economist at Wells Fargo Economics. “It’s not the linear path below. There’s still risk, but there’s no indication of re-control with the data in hand.”
The Consumer Price Index measures how quickly the price of a basket of goods and services rises or rises, from haircuts to coffee, clothing and concert tickets.
CPI inflation has fallen sharply from its pandemic-era high of 9.1% in June 2022, but it exceeds the Federal Reserve targets. The central bank aims to achieve a 2% annual rate over the long term.
“Except for major policy changes, I hope [inflation] “Of course, the big question about everyone’s mind is what are the major policy changes that will take place this year?”
Trump on Wednesday imposed new tariffs on foreign steel and aluminum imports, causing retaliation from Europe on roughly $28 billion in US goods since April. Trump’s tariffs follow others already imposed on the three biggest trading partners of the US: Canada, China and Mexico
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Taxes, taxes paid by US importers, add to the costs to businesses that are ultimately handed over to consumers, the economist said. For example, steel tariffs could make steel-intensive items, such as cars, homes, and machines, more expensive, they said.
The president has proposed additional tariffs, but it is unclear whether they will be effective.
Egg prices are up 59%
Egg prices have increased by 59% over the past year.
The highly contagious and deadly outbreak of avian influenza among birds has killed millions of egg-selling chickens and reduced egg supply, the economist said. According to news reports, the U.S. Department of Justice has also launched an investigation into potential antitrust issues related to the surge in egg prices.
According to CPI data, instant coffee prices have also increased by around 9% over the past year. Drought-like weather patterns driven by climate change have disrupted major coffee growers, including Brazil, and reduced coffee bean supply.
Overall, however, the inflation rate for food is relatively low, at 1.9% over the past 12 months.
Gasoline inflation was also tamed in February. Prices fell 1% from January to February, and 3% over the past year, according to CPI data.
Shelter is the biggest component of CPI, and up and down movements can have a significant impact on overall inflation measurements. Shelter’s annual inflation was 4.2% in February, the lowest since December 2021.
“Housing inflation has historically been the ‘close-close’ component of inflation, meaning it takes time to absorb price trends,” Gargi Chaudhuri, a leading investment and American portfolio strategist at BlackRock, wrote in an email Wednesday. “Recent trends in home prices keep us optimistic about future inflation trajectories.”
Adjusted: The consumer price index fell from 3% in January. Previous versions were incorrect.
