U.S. consumer inflation slightly decreased in February based on official data released on Wednesday, during President Donald Trump’s first complete month back in the White House. However, worries persist about persistent price increases amid growing unease regarding the administration’s trade policies.
According to the Department of Labor, the Consumer Price Index (CPI) was recorded at 2.8 percent for last month compared to the previous year, which is a decrease from 3.0 percent in January.
Although reducing inflation would provide some comfort to policymakers, the most recent data shows the lowest figure in merely four months, indicating a more extended journey toward returning price hikes to officials’ two-percent objective.
The globe’s largest economy is currently facing concerns about an economic slowdown as well as imminent inflation, both triggered by the increasing range of tariffs being implemented under Trump’s administration.
On Wednesday, Trump imposed new tariffs of 25 percent on steel and aluminum imports, which immediately triggered promises of strong retaliation from major U.S. trade allies.
The European Commission stated that they would implement countermeasures starting from April 1 to address the “unwarranted trade limitations” imposed by Washington.
From January to February, the Consumer Price Index rose by 0.2%, according to Labor Department figures, which also indicate a slowdown compared to January’s increase of 0.5%.
excluding the fluctuating food and energy sectors, the index rose by 3.1 percent compared to the previous year, showing progress over time.
In the previous month, an increase in expenses related to shelters was partly counterbalanced by decreases in airline ticket fees and gasoline prices. Additionally, the cost of food saw an uptick during this period.
According to the report, the egg index surged by 10.4 percent.
Egg costs — a prominent political topic — have skyrocketed lately due to the nation’s struggle with an avian influenza outbreak.
Economist Dan North from Allianz Trade North America stated, ‘I anticipate encountering greater risks moving ahead, notably due to the tariffs and the associated uncertainties.’
“You could call this degree of uncertainty pioneering,” he stated to AFP.
Despite inflation coming in slightly under the projected estimates from financial experts, North highlighted that the pace of decline continues to be slow.
The milder temperature readings on Wednesday may not be sufficient to encourage the Federal Reserve to pursue additional interest rate reductions, considering that the U.S. economy remains resilient.
Even as our expenditures are decreasing, they remain high; however, the job market remains robust,” North stated. “In terms of boosting economic activity, there’s no necessity for a reduction.
The Federal Reserve’s policy makers are scheduled to meet next Tuesday and Wednesday to consider potential modifications to the key interest rate. This comes following Chairman Jerome Powell’s statement last week suggesting that the central bank does not need to hurry with making alterations.
