GRISPB – STOCK.ADOBE.COMInflation continued to gradually cool in February, though it’s still well above the target range. Inflation peaked at more than 9% during the pandemic.
A key inflation indicator, the consumer price index rose 0.4% in February and 6% on a year-over-year basis, versus a 6.4% year-over-year gain the prior month, according to the U.S. Bureau of Labor Statistics, the slowest pace since September 2021.
Excluding food and energy prices, consumer prices advanced 5.5% from a year earlier in February, compared with 5.6% in January, according to a CNBC report. Economists also viewed core prices as a better indicator of future inflation. Core CPI increased 0.5% in February, compared with a 0.4% gain in January, according to a Reuters report.
Year-over-year inflation cooled from a peak in June 2022 but remains high. The recent collapse of Silicon Valley Bank and other financial institutions is complicating the Federal Reserve’s decision making on how much to raise its benchmark interest rate in an effort to further reduce inflation.
Before the bank failures, the broader economy had shown strength to start 2023. Spending at retailers and restaurants rose in January at the fastest monthly rate in nearly two years. The February jobs report showed that employers added 311,000 jobs, after adding a half million in January.
Signs of a slowdown still exist. Economists estimate that retail spending declined in February, and the Commerce Department was expected to release new consumer data.
Wage growth moderated last month, suggesting that tight labor markets aren’t leading to rapid pay raises.
