A jump in energy and medical care offset the more modest rise in shelter. 
The BLS reports the Consumer Price Index for All Urban Consumers (CPI-U) increased 0.3 percent on a seasonally adjusted basis in February,
The BLS rounds to 1 decimal point. I show 2 decimal places
CPI Month-Over-Month
- All Items: 0.27 percent
- All Items Excluding Food and Energy: 0.22 percent
- Food and Beverage: 0.37 percent
- Shelter: 0.23 percent
- Owners’ Equivalent Rent: 0.22
- Rent of Primary Residence: 0.13
- Medical Care: 0.39 percent
- Medical Care Services: 0.61 percent
- Medical Care Commodities: 0.00 percent
- Energy: 0.63 percent
- Gasoline: 0.80 percent
- Food at Home: 0.44 percent
- Food Away from Home: 0.32
Other than shelter and its components (OER and Rent) this was a downright miserable report.
Since shelter is 35.612 percent of the CPI, it has an oversized weight on the CPI.
In contrast, the largest component of the PCE (the Fed’s preferred measure of inflation), is Health Care Services at roughly 18 percent of the PCE.
This jump in health care services is a prelude to what I expect when we have PCE data for January later this month.
I will do a separate report on health care later today.
CPI Month-Over-Month Energy, Gasoline, Utilities
Energy, Gasoline, Utilities and Fuel Month-Over-Month
- Energy: 0.63 percent
- Gasoline: 0.80 percent
- Utilities and Fuel: 0.47
These numbers are for February. The war in Iran was not even in play for those numbers.
CPI Year-Over-Year Percent Change
CPI Year-Over-Year Percent Change Details
- All Items: 2.4 percent
- All Items Excluding Food and Energy: 2.5 percent
- Food and Beverage: 3.0 percent
- Shelter: 3.0 percent
- Medical Care Services: 4.1 percent
- Utilities and Fuel: 5.6 percent
- Energy: -0.5 percent
Those year-over-year headline numbers matched the Bloomberg Econoday estimates.
The good news ends there.
I expect a rise in year-over-year CPI each month for the next three months. And that’s excluding energy and gasoline which hugely rates to add additional misery.
Unless we have a huge collapse in jobs, the Fed is not going to be cutting interest rates for a while.
Beneath the headline numbers, this data is a serious mess. The market expects the cut in June is now off the table. That’s been my expectation for quite some time.
Talk of tame inflation is nonsense, especially the Fed’s preferred measure. More reports on this coming up.
Addendum
As I’ve expressed Health Care inflation is always bad news. I liken it to a “Repair and Maintainence expense b/e it doesn’t really buy anything productive – it just keeps the system going. (And even at that perhaps suboptimally Vs the prior ex ante condition.)
So since it’s essentially a tax on the system (just to keep it running) it’ll have flowthrough inflation into other components going forward. After all, it now has to be paid for.
An increase in bank CDs adds nothing to GDP. Banks pay for their earning assets with new money. All bank-held savings are lost to both consumption and investment.
Japan’s lost decade is a perfect example. The Japanese save more and kept more of their savings in their banks.
People can’t see the regression that has taken place since the early 1960’s. The Keynesian economists have achieved their objective, that there is no difference between money and liquid assets.
Bankers pay for the deposits that the system already owns. The removal of Reg. Q ceilings was a mistake. The NBFIs are the DFI’s customers.
RMPs are too high.
The 1966 Interest Rate Adjustment Act is the prescription. Drain reserves while driving the banks out of the savings business (which increases the supply of loan funds lowering interest rates)
Isn’t the devil always in the details, especially with government stats?
This is sure looking bleak for the republicans. Hints of stagflation going into the November elections. GOP will soon stand for Grandpa’s on Pensions.
Don’t worry Trump is busy trying to pass the SAVE Act to suppress voting for the next 50 years so you can continue on with MAGA morons in control of government.
https://news.meaww.com/trump-ridicules-dems-over-save-america-act-they-probably-wont-win-an-election-for-50-years
Trump ridiculed the Democratic opposition to the legislation and claimed that support for voter identification requirements is extensive. “You had to see some of this stuff is so bad. They’re doing everything possible because they know if we get this, they probably won’t win an election for 50 years, okay? And maybe longer and they’re going to fight like hell,” he said.
Trump is working hard to collapse the global economy. Once people around the world are broke, they won’t be buying any products from anywhere because there will be no job.
His first term, the acronym TACO wasn’t used. But I expected him to TACO away from his worst impulses during his second one, because he did it so frequently from 2016-2020.
(Let the record state that I have only voted 3rd-party at the top of the ticket for the last 3 presidential elections).
This time, he’s moved much faster and with fewer wise men on his staff–he’s mostly staffed up with bubble-heads and good-looking media savants.
So we’re getting this ‘King Chaos’ regime, which is way, way worse than I expected, and my expectations were already lower than a snake’s belly.
Unfortunately, Joe Sixpack needs inflation tamed much more than any other economic concern the Fed has to handle. Joe needs relief, period. He is much less concerned about the intricacies of market manipulation and job protection. They need food and gas not caviar.
Based on previous Trump doll & pencil comments…
Joe doesn’t need as much of anything anymore…
so please use the properly rebranded Joe OneBeerCan name going forward.
I agree.
That’s the disheartening part of a two-party system. The Democrats have to step up and save us all.
But they haven’t recognized, as of yet, their part in this whole disaster. Biden ignored the common voter, and caused a whole bunch of inflation.
Then the average Democratic stalwarts shifted to Trump (Blacks, Hispanics, blue-collar union guys).
It was just enough to re-elect Trump.
So now we have to depend on the Democrats to run reasonable candidates, or at least convince their base to come back to them, and get enthusiastic enough to overwhelm MAGA at the ballot box.
I’m not optimistic yet, and I don’t really trust polls anymore after watching DJT overperform them regularly.