QI Research CEO and chief strategist Danielle DiMartino Booth reacts to the ‘Apollo’ article that argues the Federal Reserve will not cut rates in 2024.
Inflation unexpectedly ticked higher in February thanks to a jump in the cost of gasoline and rent, underscoring the challenge of taming price pressures within the economy.
The Labor Department said Tuesday that the consumer price index, a broad measure of the price of everyday goods including gasoline, groceries and rent, rose 0.3% in February from the previous month. Prices climbed 3.2% from the same time last year.
Both of those figures came in higher than the 0.3% monthly increase and 3.1% headline gain recorded in January.
Other parts of the report also indicated that inflation has been slow to retreat. Core prices, which exclude the more volatile measurements of food and energy, climbed 0.4%, as it did in January. It rose 3.8% annually. Both of those figures are slightly higher than estimates.
Altogether, the report indicates that while inflation has fallen considerably from a peak of 9.1%, it remains above the Federal Reserve’s 2% target.
WHY ARE GROCERIES STILL SO EXPENSIVE?
High inflation has created severe financial pressures for most U.S. households, which are forced to pay more for everyday necessities like food and rent. The burden is disproportionately borne by low-income Americans, whose already-stretched paychecks are heavily affected by price fluctuations.
A customer shops at a grocery store on February 13, 2024 in Chicago, Illinois. (Photo by Scott Olson/Getty Images / Getty Images)
Housing and gasoline costs were the biggest drivers of inflation last month, accounting for more than 60% of the total monthly increase.
Rent costs rose 0.4% for the month and are up 5.8% from the same time last year. Rising rents are concerning because higher housing costs most directly and acutely affect household budgets.
Gasoline prices, meanwhile, surged 3.8% over the course of February. However, they remain down 3.9% when compared with the previous year.
Other price gains also proved persistent in January.
Food prices, a visceral reminder of inflation for many Americans, were unchanged over the course of the month. However, grocery prices are up 1% from the same time last year.
MORE AMERICANS ARE GETTING A SECOND JOB TO OFFSET STING OF HIGH INFLATION
The price of airline tickets and car insurance also jumped in February.
This is a developing story. Please check back for updates.
