Shelter, Medical Costs Continue to Weigh on Consumer Prices

Shelter, Medical Costs Continue to Weigh on Consumer Prices

U.S. inflation held steady in February, with consumer prices rising at an annual rate of 2.4%, unchanged from the previous month. However, new data released Wednesday by the Labor Department showed that certain categories continue to experience faster price increases.

Shelter costs—including rents—rose 3% over the past year, while medical care services climbed 4.1%, both outpacing the overall inflation rate.

Analysts expect inflation to rise in March once the economic effects of the current war in Iran are reflected in the data, particularly through higher energy prices. February figures showed energy prices increasing just 0.5% annually, helped by a 5.6% decline in gasoline prices.

Since the conflict in Iran began on Feb. 28, U.S. gasoline prices have surged by roughly 20%.

Economists at Oxford Economics said the February inflation report is unlikely to alter expectations for upcoming Federal Reserve policy decisions. The Fed is scheduled to meet March 17–18.

“If anything, we feel more confident than before that the central bank will wait until June before cutting interest rates again,” said Bernard Yaros, lead U.S. economist at Oxford Economics, in a statement Wednesday.