CPI Report: Inflation Slightly Eases, But Tariffs Indicate Changing Prices

A lot of this inflation data does not incorporate what is to come and what already has happened for tariffs. The vagaries and uncertainties associated with policy are still a much stronger force in the market than anything CPI-related or in terms of one data point.

Senior investment strategist at Charles Schwab, Kevin Gordon, discussing the February Consumer Price Index report. Data indicated prices slightly eased last month but does not offer as clear of a picture of the economy amid changing tariff policies.

Why It Matters: The Consumer Price Index (CPI) measures a mixed basket of costs of goods and services in the U.S. and is used as an important gauge of inflation (high inflation = your dollar buys you less). Today’s reading shows a slight cool in inflation numbers since last month (2.8% in February versus 3.0% in January), indicating lower prices on items such as airline fares and gasoline. However, economists warn that this month’s data makes it difficult to get an accurate picture of the economy as numbers predate recently imposed tariffs, which will likely raise prices on goods.

• CPI stands at 2.8% since February of last year — a slightly lower percentage than economists expected.
• While the pace of inflation has decreased from its 2022 peak, the annual rate continues to be above the federal government’s 2% target.
• Core inflation (“core CPI”) — seen as a better data point as the measure strips out volatile energy and food prices — shows that prices slightly cooled at 3.1%.

READ the full CPI report HERE

Read More: Inflation Cooled to 2.8% in February, Lower Than Expected (The Wall Street Journal)

Inflation rate eased to 2.8% in February, less than expected (CNBC)