In February 2024, the AIER Everyday Price Index (EPI) rose 0.73 percent to 286.9. This rise was the largest percentage increase in the index since August 2023 and the eighth largest going back to January 2022 (26 months).
In February 2024, the largest monthly price increases among EPI constituents were seen in motor fuel, postage and delivery services, and internet services. The largest declines occurred in intracity transportation, fees for lessons and instructions, and pet products. Among the twenty-four index constituents five fell in price, two were unchanged, and seventeen rose.
On March 12, 2024, the US Bureau of Labor Statistics (BLS) released Consumer Price Index (CPI) data for February 2024. The month-to-month headline CPI number rose 0.4 percent, meeting survey expectations. The core month-to-month CPI number increased by 0.4 percent, higher than the forecast of 0.3 percent.
Within the month-over-month headline CPI some of the largest gains in February 2024 were notched in gasoline, natural gas, and cereals and bakery products, while notable declines were seen in dairy products, fruits and vegetables. In the core CPI on a month-to-month basis, shelter costs continued to rise (although less than they have in recent months), along with airfares, motor vehicle insurance, apparel, recreation, and used cars and trucks. Prices fell in personal care and household furnishings.
From February 2023 to February 2024, headline CPI rose 3.2 percent, higher than the expected 3.1 percent. Year-over-year core CPI rose 3.8 percent, which was also higher than the survey prediction of 3.7 percent.
From February 2023 to February 2024, the headline CPI saw food at home rise 2.3 percent, with food at home rising 4.5 percent. In year-over-year core, shelter costs increased 5.7 percent, as did motor vehicle insurance (20.6 percent), personal care (4.2 percent), recreation (2.1 percent), and medical care (1.4 percent).
The February report adds weight to the notion that inflation remains stubborn, presenting a challenge for the Fed. While Fed Chairman Jerome Powell has recently hinted more strongly at potential rate cuts, those hints of dovishness are likely to be replaced by a return to cautionary language in upcoming speeches and other Fed communications.
In a recurring theme, shelter and gasoline were primary contributors to the monthly price surge, accompanied by increases in used cars, apparel, motor-vehicle insurance, and airfares, the latter experiencing its most significant monthly gain since May 2022. Despite this, shelter prices, particularly owners’ equivalent rent, exhibited a slight slowdown from the previous month’s substantial rise, though the methodological adjustment highlighted by the BLS continues to draw attention. While tailwinds from normalizing supply chains are cooling goods prices, concerns linger about the sustainability of this trend. In particular, the February CPI readings strongly suggest that the January updraft was not anomalous, and reinforces the notion that navigating the last one hundred to one hundred fifty basis points of disinflation may prove the most difficult.
