Inflation Isn’t Going Away

Prices continued their upwards climb in February, as core inflation rose by 0.5 percent—the highest monthly increase since September of last year.

Though Tuesday’s consumer price index report was in line with expectations, the Department of Labor’s data seemed once again to dash any hopes for a quick resolution to the inflation crisis that has strained Americans’ wallets for the past year. The annualized inflation rate for February fell slightly to 6 percent, but the underlying numbers show that prices continue to grow at a stubbornly high rate.

In February, overall prices increased by 0.4 percent and so-called “core inflation” (which filters out more volatile categories like food and fuel prices) showed a monthly increase of 0.5 percent. Rent continues to be a primary driver of overall price increases, climbing another 0.8 percent in February and up 8.1 percent over the past 12 months.

Driven in significant part by those rising housing prices, February was the third consecutive month where the core inflation rate increased. That could put more pressure on the Federal Reserve to continue hiking interest rates to combat rising prices—despite other signals, like this week’s rapid collapse of Silicon Valley Bank, that rising interest rates come with their own costs.

“Every measure of CPI inflation is down from its peak over the summer, partly because some of that inflation was truly transitory and partly because the Fed’s rate hikes [have] kept the economy from getting much hotter and kept long-run inflation expectations anchored. That is good,” tweeted Jason Furman, a Harvard economist and former White House economic advisor. “But, st