The annual inflation rate in the United States reached 6% in February 2023, which is a slight decrease from the previous month and the lowest level since September 2021. The reading came in line with market forecasts, indicating that the inflation rate is stabilizing.
The energy index increased by 5.2% in February, which is a significant factor in the inflation rate. Month over month the energy index fell by 0.6% in February after increasing by 2.0% in January. The natural gas index decreased by 8.0%, the largest decrease in that series since October 2006, while the gasoline index rose by 1.0%.
The food index also increased by 9.5%. Month over month the food at home index rose by 0.3%. The nonalcoholic beverages index increased by 1.0%in February, while the meats, poultry, fish, and eggs index decreased by 0.1%. The food away from home index rose by 0.6%. Over the last 12 months, the food at home index rose by 10.2%, while the index for food away from home rose by 8.4%.
Core inflation, which excludes volatile food and energy prices, also edged lower to 5.5% from 5.6%, indicating that the underlying inflationary pressures are also moderating. However, this is still significantly higher than the Federal Reserve's target of 2%.
Overall, the inflation rate in the United States is still high, but the slight decrease in February suggests that the rate of inflation may be stabilizing. However, the Federal Reserve will continue to monitor the situation closely.