Inflation Stayed Steady Ahead Of Iran War

Key Takeaways

• The Consumer Price Index rose 2.4% over 12 months ending in February, the same inflation rate as January and matching forecaster expectations.
• The measurement did not show the effect of the Iran war, which sent gasoline prices soaring as oil supplies were disrupted.
• Inflation has run above the Federal Reserve’s goal of a 2% annual rate since 2021.

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A key measure of inflation stayed steady in February before the war in Iran sent gas prices soaring.

What This Means For The Economy

Inflation remained in its recent pattern, staying stubbornly above the Fed’s 2% goal but not surging out of control—but the Iran war has shaken up the outlook.

The cost of living as measured by the Consumer Price Index rose 2.4% over 12 months in February, the Bureau of Labor Statistics said Wednesday. That was the same annual increase as in January and matched forecasts from a survey of economists by Dow Jones Newswires and The Wall Street Journal. “Core” prices, excluding the volatile categories of food and energy, rose 2.5% over the year, also the same as the previous month and in line with expectations.

Related Education

What Is the Consumer Price Index (CPI)?

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The report showed inflation’s trajectory remained steady ahead of the war in Iran, which has driven national average gasoline prices up by more than 50 cents a gallon over the last two weeks. Fighting has disrupted shipping from the oil-producing region.

Inflation has stubbornly remained above the Federal Reserve’s 2% annual target as tariffs have pushed up prices for some goods, even as housing inflation has cooled. Inflation surged in late 2021 as the economy reopened from COVID-19 restrictions and has yet to cool down to pre-pandemic levels.

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