Inflation ran hotter than expected in February as high prices persist

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QI Research CEO and chief strategist Danielle DiMartino Booth reacts to the ‘Apollo’ article that argues the Federal Reserve will not cut rates in 2024.

Inflation unexpectedly ticked higher in February thanks to a jump in the cost of gasoline and rent, underscoring the challenge of taming price pressures within the economy.

The Labor Department said Tuesday that the consumer price index, a broad measure of the price of everyday goods including gasoline, groceries and rent, rose 0.4% in February from the previous month. Prices climbed 3.2% from the same time last year. 

Both of those figures came in higher than the 0.3% monthly increase and 3.1% headline gain recorded in January.

WHY ARE GROCERIES STILL SO EXPENSIVE?

Other parts of the report also indicated that inflation has been slow to retreat. Core prices, which exclude the more volatile measurements of food and energy, climbed 0.4%, as they did in January. It rose 3.8% annually. Both of those figures are slightly higher than estimates.

Altogether, the report indicates that while inflation has fallen considerably from a peak of 9.1%, it remains above the Federal Reserve's 2% target. 

THE NUMBER OF HIGH-PAYING JOBS IS DWINDLING

High inflation has created severe financial pressures for most U.S. households, which are forced to pay more for everyday necessities like food and rent. The burden is disproportionately borne by low-income Americans, whose already-stretched paychecks are heavily affected by price fluctuations.

A customer shops at a grocery store on Feb. 13, 2024 in Chicago. (Photo by Scott Olson/Getty Images / Getty Images)

Housing and gasoline costs were the biggest drivers of inflation last month, accounting for more than 60% of the total monthly