|The Consumer Price Index, the broadest measure of consumer prices, rose 6% annually in February. That is down from the peak of 9.1% in June 2022, but still very high. Inflation rose 0.4% from January to February.
Why it matters: This is a strong signal that we are not through with inflation yet.
By the numbers: Monthly data had been falling rapidly before the last few months.
- Housing was the biggest driver in February. Prices for recreation, household furnishings and operations, and airline fares also rose.
- Prices for used cars and trucks and for medical care decreased.
- Core prices (all items less food and energy) rose 0.5% and are up 5.5% annually, which is high.
- On an annual basis, prices of necessities like electricity (12.9%), food at home (10.1%), and housing (8.1%) rose; gas (2%) declined.
Bottom line: With the problems in the banking sector this week, there have been calls for the Fed to stop raising interest rates. But the strong February jobs report and this most recent inflation reading mean the Fed needs to keep raising rates to tame inflation.