US February consumer price inflation was broadly in line with expectations. Headline prices rose 0.3% month-on-month\/2.5% year-on-year while core inflation (excluding food and energy) was only 0.2%\/2.4%, suggesting inflation pressures were well-behaved ahead of the military action in Iran. Used vehicle prices fell 0.4% MoM, new vehicle prices were flat, education and communication prices fell 0.2% and housing costs rose only 0.2%, which helped to offset larger increases for appliances (+3.1% MoM) apparel (+1.3%), medical care services (+0.6%) and airline fares (+1.3%).<\/p>\n
The chart below shows that sectors vulnerable to the effects of tariffs \u2013 goods prices ex food and energy \u2013 remain remarkably benign. That is mainly down to weakness in auto prices, but even if we strip out autos, core goods rose only 0.2% MoM. Appliances did catch the eye with their 3.1% MoM increase, following a 1.3% gain in January, but this followed 1.1% and 2.6% monthly drops in November and December so it is difficult to argue tariffs are having a major impact on prices.<\/p>\n
All we can say is that with import prices continuing to rise and consumer prices looking benign, the extra $20-$25bn of tariff costs per month are being borne by corporate America. Productivity gains are often cited as a factor limiting the inflation effect, but we note that imports are rising quickly again now that all the pre-tariff inventory build from late 2024\/early 2025 has been exhausted. That suggests more tariff costs to come. As such, we can\u2019t exclude the possibility that tariffs will eventually have a more noticeable impact on prices.<\/p>\n","protected":false},"excerpt":{"rendered":"US February consumer price inflation was broadly in line with expectations. Headline prices rose 0.3% month-on-month\/2.5% year-on-year while…\n","protected":false},"author":2,"featured_media":334319,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[42,43,40,38,41,39],"class_list":["post-334318","post","type-post","status-publish","format-standard","has-post-thumbnail","category-headlines","tag-headlines","tag-news","tag-top-news","tag-top-stories","tag-topnews","tag-topstories"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/334318","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/comments?post=334318"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/334318\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media\/334319"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media?parent=334318"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/categories?post=334318"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/tags?post=334318"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}