United States: Inflation rises in February
Consumer prices increased a seasonally-adjusted 0.35% over the previous month in February, accelerating from January’s 0.26% rise. February’s uptick marked the sharpest increase in prices since July 2020. The acceleration was primarily driven by rising prices for housing. In addition, price pressures for transportation also grew at a quicker rate.
Inflation came in at 1.7% in February, above January’s 1.4%. Meanwhile, the trend was unchanged with annual average inflation coming in at January’s 1.1% in February. Core inflation edged down to 1.3% from January’s 1.4%.
Commenting on the outlook for inflation, Leslie Preston, senior economist at TD Economics, noted:
“Inflation will head higher in the months ahead, as prices are compared to the very low levels of spring 2020 at the height of the pandemic shutdowns. After that, the mountain of fiscal and monetary stimulus that has been unleashed to support the economy does present an upside risk to the outlook. However, as Treasury Secretary, Janet Yellen, has pointed out, policymakers are well equipped to deal higher inflation. Fed Chair Powell appears to be singing from the same song sheet, emphasizing that given the millions of jobs lost over the past year, he is more concerned about the full employment side of the Fed’s mandate than accelerating inflation.”