US inflation slows in February

The data

US consumer prices rose by 0.2% in February compared to the previous month. The year-on-year rate fell from 3.0% to 2.8%. The more important core rate, which excludes volatile prices for energy and food, was also 0.2% on the previous month, while the annual rate of change fell from 3.3% to 3.1%. The data were consistently below consensus expectations of a monthly increase of 0.3% both for the headline and the core index.

Background

Following the surprisingly strong rise in US consumer prices in January, price pressure in February was lower than expected and similar to the months at the end of 2024. This also applies to the important core rate. Inflation eased for both core services (month-on-month rate 0.3% after 0.5%) and core goods (0.2% after 0.3%).

The figures are in line with our assessment expressed a month ago that the price surge in January was inflated by a special effect. Many companies raise their prices in January, especially when they are faced with significantly rising costs. The data should actually be adjusted for such seasonal influences. However, this phenomenon did not occur to the same extent during the phase of price stability before the pandemic, so it may not be fully factored out.

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