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This is a developing story about the consumer price index for February 2026. Please check back for updates.
Inflation remained high in February as the pace of consumer price growth remained above the Federal Reserve’s target rate as policymakers weighed affordability concerns.
The Bureau of Labor Statistics said on Wednesday that the consumer price index (CPI) – a broad measure of how much everyday goods such as gas, groceries and rent cost – rose 0.3% monthly in February and held steady at 2.4% year-on-year. The annual figure was unchanged from January, and the monthly gain was slightly above the previous month’s reading of 0.2%.
Expectations versus reality
Both figures were in line with the expectations of economists polled by LSEG.
So-called core prices, which exclude variable rates of fuel and food to better gauge price growth trends, rose 0.2% from the previous month and rose 2.5% from a year ago. Those figures were in line with what economists had expected.
The monthly CPI figure was cooler than January’s reading by 0.3%, while the annual figure was unchanged from last month.
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Economists have noted that inflation data from December 2025 to April 2026 will be affected due to data collection disruptions caused by the 43-day government shutdown.
During the shutdown, the BLS was unable to collect data and used a carry forward method to cover the missing October CPI report and the missing data in the November report. Economists say going forward this is likely to transmit a downward bias in inflation data until this spring, when new data will reverse the difference.
Cost of living deterioration
High inflation has put a lot of financial pressure in recent years on many US households, who are forced to pay more for everyday necessities like food and rent. Inflation is especially hard on low-income Americans, because they tend to spend more of their already stretched paychecks on necessities and have less flexibility to save.
Food prices rose 0.4% in February and are up 3.1% from a year ago. The eating at home index rose 0.4% for the month and 2.4% from last year, while the eating away from home index rose 0.3% monthly and is 3.9% higher than last year. Monthly price increases in each category rose from 0.2% in January.
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Inflation held steady in February, remaining above the Fed’s target. (Justin Sullivan/Getty Images/Getty Images)
Prices of meat, poultry and fish rose 0.2% in February and rose 6.8% compared to last year. Beef and beef prices jumped 1.5% for the month and rose 14.4% for the year. Egg prices continued to fall following the bird flu outbreak affecting the cash supply, with prices down 3.8% for the month and 42.1% from last year. The fruit and vegetable index increased by 1.4% in February and is 2.7% higher than last year.
Electricity prices rose 0.6% in February but were only up 0.5% from a year ago. Fuel prices increased by 0.8% in February but decreased by 5.6% compared to the same month last year. Utility gas service prices rose 3.1% in February and are up 10.9% from a year ago. Electricity prices fell 0.7% in February and are 4.8% higher than last year.
Home prices rose 0.2% in February and are up 3% from a year ago, as the BLS noted that the housing index was the biggest factor in the monthly CPI increase. Homeowners and home insurance prices were little changed and rose 0.1% in February, but rose 6.2% last year.
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Prices for transportation services increased by 0.2% in the month and 2.2% in the last year. Car maintenance and repair prices rose 0.9% in February and were up 5.6% from a year ago. Auto insurance prices were down 0.3% for the month and up 0.2% over the past year. Air fares rose 1.4% in February and are up 7.1% from a year ago.
Health care services increased 0.6% in February and are up 4.1% over the past 12 months. Prices for personal care services were up 0.3% monthly and 4.9% annually.
Household goods increased by 0.2% in the month and 3.9% in the previous year. The price of furniture and bedding was lower this month but increased by 4.2% compared to last year. Consumer electronics prices rose 3.1% in February but were up 2.9% from a year ago.
Federal Reserve Chairman Jerome Powell and central bank policymakers are monitoring economic data as they weigh possible interest rate cuts. (Chip Somodevilla/Getty Images/Getty)
Expert analysis
“Before the Iran war sent gas prices soaring, inflation was starting to look better. February’s 2.4% inflation rate is one of the lowest in five years, but it won’t stay that way as gas prices rise above $3.50 a gallon,” said Heather Long, chief economist at Navy Federal Credit Union.
“A flat inflation reading would be welcome data on any other day, but against the current backdrop of global uncertainty and rising oil prices, it may not carry much weight for the markets — or for the Fed,” said Ellen Zentner, chief economist for Morgan Stanley Wealth Management.
“Despite the prospect of draining oil reserves, continued uncertainty translates to continued risk to oil prices, and that translates to the Fed remaining cautious about lowering interest rates,” Zentner said.
What does it mean for the Fed
The Federal Reserve will hold its next monetary policy meeting next week on March 17-18, when it will announce its latest interest rate decision.
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Market expectations that the Fed will leave the benchmark federal funds rate unchanged in its current range of 3.5% to 3.75% have been bolstered by the February CPI inflation report.
The probability that the Fed will hold rates steady rose to 99.3%, up from 98.3% last week and 93.6% last month, according to the CME FedWatch tool.
