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February Price Statistics

The Consumer Price Index (CPI) was virtually unchanged from January, rising only 0.3 percent at an annualized rate in February. This moderation - from increases of 4.8 percent in January and 4.4 percent in December - resulted from a modest increase in food prices, which was offset by a decrease in energy prices, and a slowdown in price appreciation among all items less food and energy. The CPI excluding food and energy (core CPI) was flat, rising only 0.5 percent (at an annualized rate) during the month, compared to a 3.8 percent jump in January. The Median and 16 Percent Trimmed-Mean CPI measures rose 1.4 percent and 1.0 percent, respectively, in February. This stands in stark contrast to last month, when both measures of underlying inflation rose in excess of 4 percent. Producer prices remained elevated in February, as the Producer Price Index (PPI) for finished goods rose 4.2 percent and the PPI excluding food and energy surged 6.8 percent, outpacing all of its longer-term trends.

February Price Statistics

Percent change, last
1mo.a 3mo.a 6mo.a 12mo. 5yr.a 2007 avg.
Consumer Price Index
All items 0.3 3.1 4.7 4.0 2.9 4.2
Less food and energy 0.5 2.3 2.5 2.3 2.1 2.4
Medianb 1.4 3.0 3.2 3.0 2.6 3.1
16% trimmed meanb 1.0 2.7 3.0 2.8 2.4 2.8
Producer Price Index
Finished goods 4.2 4.0 9.6 6.4 3.9 7.0
Less food and energy 6.8 4.8 3.2 2.4 1.9 2.1
a. Annualized.
b. Calculated by the Federal Reserve Bank of Cleveland.
Sources: U.S. Department of Labor, Bureau of Labor Statistics; and Federal Reserve Bank of Cleveland.

The 12-month growth rate in the CPI was 4.0 percent in February, down 0.3 percentage point from a month ago. The core CPI and trimmed-mean measures ticked down as well and are now ranging between 2.3 percent and 2.8 percent.

CPI, Core CPI, and Trimmed-Mean CPI Measures

Over the past three months, nearly 55 percent of the components of the CPI rose in excess of 3.0 percent, compared to only 32 percent in February. Some relatively large components, such as lodging away from home and motor fuel prices, decreased during the month, after posting strong increases over the last quarter. However, components with strong responsiveness to commodity prices - like jewelry and watches - continued to show large price increases.

CPI Component Price Change Distributions

Core services prices rose just 1.0 percent in February, their smallest increase since May 2005. As a consequence, the 12-month growth rate in core services prices ticked down to 3.2 percent from 3.4 percent in January. Core goods prices fell 0.9 percent during the month and have remained unchanged over the past 12 months.

Core CPI Goods and Core CPI Services

According to the March preliminary Survey of Consumers (University of Michigan) near-term (one-year ahead) household inflation expectations jumped up from 3.9 percent in February to 4.6 percent. Expectations over the longer-term (5 to 10 years), however, actually ticked down to 3.3 percent.

Household Inflation Expectations

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