The Bureau of Labor Statistics reported that consumer prices increased 0.2 percent in February, slowing from a robust 0.5 percent gain in January. Food and energy costs decelerated in the latest data, with the latter being one of the bigger drivers of higher consumer prices in the prior release. Energy costs inched up 0.1 percent in February, slowing after a rise of 3.0 percent in January, with gasoline prices off 0.9 percent. This is largely consistent with data from the Energy Information Administration, which pegged the average price for regular conventional gasoline at $2.516 per gallon on January 29 but fell to $2.442 a gallon on February 26. At the same time, food prices were flat in February. Since February 2017, food and energy costs have increased 1.4 percent and 7.7 percent, respectively.
Excluding food and energy, core consumer inflation rose 0.2 percent in February, down slightly from 0.3 percent growth in January. Higher costs for apparel, shelter and transportation services helped to push core consumer prices higher in the latest data, with lower costs for medical care commodities and new and used vehicles.
The consumer price index has risen 2.3 percent over the past 12 months, the fastest year-over-year pace since March 2017. Despite the acceleration in consumer costs, overall pricing pressures remain mostly modest. While consumer inflation represents an increase from 1.6 percent year-over-year in June 2017, it remains well below the 2.8 percent pace seen one year ago. Moreover, core consumer prices, which exclude food and energy costs, have risen 1.9 percent over the past 12 months. This would indicate that inflation remains under control for now, even if core consumer prices have accelerated in recent months.