February inflation cooled slightly after January jump

The Consumer Price Index (CPI) rose 0.2% in February, and 2.8% year over year, the Bureau of Labor Statistics reported this week—a lower-than-expected increase. The index, which covers the first full month of the Trump administration, does not reflect the looming impact of tariffs beyond the 10% tax on Chinese imports.

The index for food inched up 0.2%, while food away from home jumped 0.4% and food at home stayed flat monthly, up 1.9% YoY. Four of the six major grocery categories saw declines, as CPI decreased for fruits and vegetables (0.5%), nonalcoholic beverages (0.5%), dairy and related products (1.0%), and other food at home (0.5%).

After a 0.4% drop in January, cereals and bakery products increased 0.4%. Meats, poultry, fish, and eggs rose 1.6%, thanks to a 10.4% rise in egg prices, up 58.8% YoY, which follows the 15.2% monthly egg-price increase in January. (While egg prices remain high, a demand drop has given producers a chance to gain ground on the egg deficit, leading to declining prices, the USDA said last week.)

Across other retail categories: The index for apparel was up 0.6%, while personal care products increased 0.9%.

In a statement, White House Press Secretary Karoline Leavitt touted a low core CPI, which excludes food and energy and rose 3.1%. However, a poll published this week by the Groundwork Collaborative and Data for Progress in tandem with the CPI found that among voters, food prices were the top concern across all consumer prices, followed by utilities like energy.

While President Trump temporarily paused the imposition of tariffs for Mexico and Canada that threaten to raise prices for consumer goods like groceries and apparel, they’re set to go into effect on April 2. On Wednesday, Trump announced a 25% tariff on steel and aluminum imports, which was met with swift retaliatory tariffs from the European Union and Canada and will likely elevate costs for a number of industries, including beverage makers.

Next up: Retail sales for the Trump administration’s first full month are set to be released on Monday. According to the CNBC/NRF Retail Monitor, retail sales excluding automobiles, gasoline, and restaurants, dipped in February by 0.22%.