Inflation Fears Recede After Another Tame CPI Report, Pause In The Storm?

The CPI jumped 0.4% in February, led by gasoline. Year-over-year inflation was benign once again.

Consumer Price Index for February 2021 

Economists are scouring the BLS CPI Report for February looking for signs of inflation. 

Month-Over Month Details

  • The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.4 percent in February on a seasonally adjusted basis after rising 0.3 percent.
  • The gasoline index continued to increase, rising 6.4 percent in February and accounting for over half of the seasonally adjusted increase in the all items index. 
  • The electricity and natural gas indexes also increased, and the energy index rose 3.9 percent over the month. 
  • The food index rose 0.2 percent in February, with the index for food at home and the index for food away from home both rising. 
  • The index for all items less food and energy rose 0.1 percent in February. 
  • The indexes for shelter, recreation, medical care, and motor vehicle insurance all increased over the month. 
  • The indexes for airline fares used cars and trucks, and apparel all declined in February.

I put gasoline on the chart but it so distorted the scale that nothing else was readable.


CPI Year-Over-Year Percent Change NSA 2021-02

Year-Over-Year Details 

  • The all items index rose 1.7 percent up from 1.4 percent in January. 
  • The index for all items less food and energy rose 1.3 percent over the last 12 months.
  • The food index rose 3.6 percent over the last 12 months.
  • The energy index increased 2.4 percent over the last 12 months. 
  • Medical care services rose 3.0 percent over the last 12 months.
  • The Shelter Index rose 1.5% over the last 12 months.

Pause in the Storm?

I think not. Nor do I think there is a much of a storm to begin with. 

Before anyone of my readers scream, I am talking about inflation as measured not as really exists. 

It's easy to have "low inflation" when you don't count housing and undercount the cost of medical care.

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