United States Inflation February 2020

United States

United States: Inflation softens in February

March 11, 2020

Consumer prices increased 0.1% over the prior month in February, matching January’s rise and above market expectations of a flat reading. Higher prices for food and shelter were partially offset by a sharp decline in energy prices amid the global demand shock caused by the coronavirus outbreak. Core consumer prices—which exclude volatile items such as food and energy—ticked up 0.2% in February, rising by the same margin as in January.

Inflation eased to 2.3% in February from January’s over one-year high of 2.5%, but was a notch above market expectations of 2.2%. On the other hand, core inflation edged up to 2.4% from 2.3%. The core personal consumption expenditures index—a gauge of household spending closely followed by the Fed—rose to 1.6% in January from 1.5% in December, the latest month for which data is available, continuing to track below the Fed’s 2.0% target.

Tepid price pressures in February are likely to persist in the months ahead, as the effects of the coronavirus outbreak dampen consumer spending and have depressed global oil prices. Weighing in on February’s reading, Leslie Preston, senior economist at TD Economics, noted:

“February's CPI paints a picture of a pretty steady-eddy inflation backdrop in the U.S. before the coronavirus hits the economy in earnest. […] We are likely to see discounting for many affected goods and services if, as we expect, "social distancing" leads to a drop in demand for discretionary purchases.”

FocusEconomics participants expect inflation to average 2.1% in 2020, which is unchanged from last month’s forecast. For 2021, the panel expects inflation to average 2.0%.


Author:, Economist

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United States Inflation February 20 20

Note: Year-on-year and month-on-month variation of seasonally-adjusted consumer price index in %.
Source: Bureau of Labor Statistics.


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