Lower gasoline prices fueled last month’s decline in the consumer price index.
The latest U.S. annual inflation rate, released on March 12, came in below economists’ expectations, driven by lower energy costs.
According to the Bureau of Labor Statistics (BLS), the annual inflation rate slowed to 2.8 percent in February, down from 3 percent in January.
Core inflation, which strips the volatile energy and food components, also eased to 3.1 percent, down from 3.3 percent in the previous month.
The Consumer Price Index (CPI) and core CPI each rose 0.2 percent monthly.
Lower energy costs helped lower inflation last month as gasoline tumbled by 1 percent. The energy index increased by 0.2 percent.
Crude oil prices have taken a sharp dive this year, falling nearly 7 percent to around $67 per barrel. Oil has come under pressure on growing supply, increasing demand fears, and a potential peace agreement in the Ukraine–Russia war.
This has helped gasoline prices start shifting lower. According to the American Automobile Association, the national average price of gasoline is $3.08, down by about 9 percent from a year ago.
The index for shelter jumped to 0.3 percent, accounting for about half of the February increase. In the 12 months ending in February, shelter is up by 4.2 percent.
While economists and policymakers had expected shelter costs to decline sharply by now, progress in combating shelter inflation has been slow. Shelter typically makes up about one-third of the CPI.
In the CPI report, used cars and trucks and apparel registered monthly gains of 0.9 percent and 0.6 percent, respectively.
Eggs continued to rocket in February, surging more than 10 percent. On a year-over-year basis, eggs are up nearly 59 percent.
However, eggflation could be dissipating. According to the U.S. Department of Agriculture, the cost of a dozen eggs is now at the lowest level since December, tumbling below $6.
Last month, Agriculture Secretary Brooke Rollins released a five-step $1 billion plan to fight the ballooning cost of eggs. This included spending $500 million to help poultry producers install biosecurity measures, offering $400 million in relief for farmers impacted by the ongoing avian flu outbreak, and temporarily depending on egg imports.
