CPI report shows inflation held steady at a 2.4% annual pace in February

The Consumer Price Index rose at an annual rate of 2.4% in February, unchanged from the prior month and representing a cooler pace than economists had forecast.

The Labor Department data captures the period before the Iran war broke out in late February. Since then, oil prices have surged, driving inflation concerns among investors.

By the numbers
Inflation was forecast to rise 2.5% last month, according to economists polled by financial data firm FactSet. The CPI, a basket of goods and services typically bought by consumers, tracks changes in those prices over time.

Inflation has averaged 2.5% over the last three months, compared with about 2.9% in August, September and November. October’s CPI report was canceled because of the government shutdown.

So-called core inflation, a measure of CPI that excludes volatile food and energy prices, rose 2.5% on an annual basis. That’s unchanged from January, according to the Bureau of Labor Statistics.

Food costs rose faster than overall inflation, rising 3.1% on an annual basis, while food away from home — or the cost of eating out — jumped 3.9%.

Consumers got a break at the pump last month, with gasoline tumbling 5.6% on an annual basis. But that progress is all but sure to be erased in March, given that gas prices have surged by almost 60 cents per gallon, or about 20%, since the outbreak of the Iran war.

The Iran war threatens to stall or even reverse progress in taming inflation, with rising oil prices pushing up gasoline costs and potentially spilling over into other parts of the economy, economists say.

“The path towards disinflation has become murkier,” said DeutscheBank analysts in a March 10 research note. Higher energy prices could “lead to higher headline inflation” in the coming months, they added.