US inflation slows more than expected
By Benjamin Chiou
Date: Wednesday 12 Mar 2025
(Sharecast News) - US inflation slowed more than expected in February, according to preliminary estimates released on Wednesday, with consumer prices rising just 0.2% - though cost pressures are likely to pick up in the months ahead as the impact of trade tariffs begins to set in.
That followed a 0.5% increase in the consumer price index (CPI) in January, coming in below the 0.3% consensus forecast.
In year-on-year terms, the Labor Department reported that the CPI was up 2.8% in February, with annual inflation slowing from the 3.0% reported the month before, shy of the 2.9% expected by the market.
This was the first slowdown in the CPI following four consecutive months of annual increases, after inflation touched a three-year low of 2.4% in September.
Gasoline prices were 3.1% lower than last year, compared with -0.2% deflation in January, while price rises for shelter, used cars and trucks, and transportation all eased. Food inflation, however, picked up slightly to 2.6% from 2.5%.
Meanwhile, core annual inflation - which excludes more volatile items like food and energy - eased to 3.1% in February from 3.3% the month before, compared with the 3.2% that analysts had pencilled in.
Nevertheless, Susannah Streeter, head of money and markets at Hargreaves Lansdown, warned that inflationary pressures could soon pick up once again.
"President Trump had vowed to immediately hose down inflation when he returned to the White House but his fiery trade policies instead risk reigniting prices. With 25% tariffs imposed on US importers of steel and aluminium, it's set to push up costs for a raft of manufacturers, not least automakers and food producers," Streeter said,
"There is only so much manufacturers can absorb, and car giants look set to be faced with the double whammy of higher costs and ultra cautious consumers, unwilling to splash out on big ticket items amid the uncertainty."
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