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February inflation breakdown: Where are prices still rising the fastest?
A ‘Mornings with Maria’ panel discusses the U.S. economy and markets after the January year-over-year CPI comes in at 3.1%.
Inflation rose faster than expected in February as an increase in the cost of rent and gasoline kept prices elevated for millions of U.S. households.
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 0.4% in February from the previous month. Prices climbed 3.2% from the same time last year. Both of those figures are higher than they were the previous month.
“Inflation continues to churn above 3%, and once again shelter costs were the main villain,” said Robert Frick, corporate economist at the Navy Federal Credit Union. “The good news is food prices didn’t rise last month, but the bad news is one of the other main pain points for consumers, transportation costs, rose quite a bit.”
Here is a breakdown of where Americans are seeing prices rising and falling the fastest as they continue to wrestle with sticker shock.
INFLATION RAN HOTTER THAN EXPECTED IN FEBRUARY AS HIGH PRICES PERSIST
Rent
Housing costs were once again one of the biggest drivers of inflation last month. Rent costs rose 0.4% for the month and are up 5.8% from the same time last year.
A “for rent” sign is posted in front of a home on Dec. 12, 2023, in Miami, Florida. (Joe Raedle / Getty Images)
Rising rents are concerning because higher housing costs most directly and acutely affect household budgets. Another data point that measures how much homeowners would pay in equivalent rent if they had not bought their home also climbed by 0.4% from the previous month.
RISING CHILD CARE PRICES STARTING TO BITE US FAMILIES
Food
Food has been one of the most visceral reminders of red-hot inflation for Americans. In February, the cost of groceries was unchanged – a major reversal from January, when it rose 0.4%.
However, on an annual basis, grocery prices remain up 1%, according to the data. And when compared with January 2021, before the inflation crisis began, grocery prices are up a stunning 21%.
A customer shops at a grocery store on Feb. 13, 2024, in Chicago. (Scott Olson / Getty Images)
The cost of eggs surged 5.8% in February amid another outbreak of the avian flu. Consumers also paid more for other goods, including breakfast cereals (2%), cookies (2.1%), beef and veal (0.5%), bacon (0.9%), ham (1.2%), bananas (1.7%), sugar (0.6%), butter (0.2%) and fresh vegetables (1.5%), including lettuce (2.5%) and tomatoes (2.6%).
However, there were also some substantial declines in food prices last month. The cost of coffee, bread, pork, hot dogs, chicken, milk, cheese, apples and citrus fruits all fell in February.
CREDIT CARD DEBT RISING IN DOUBLE-EDGED SWORD FOR ECONOMY
Energy
Energy prices jumped in February for the first time in months, adding to the financial pressure that many families are already enduring. Prices rose 2.3% during the month, including a 3.8% jump in gasoline.
The average cost of a gallon of gas hit $3.94 on Tuesday, according to AAA, up more than 6% from one month ago. It marks the highest level in four months for gas prices.
Electricity costs also rose 0.3% in February and remain 3.6% higher than the prior year.
Cars
There was some bad news for Americans looking to buy a used car in February.
The cost of used cars – which were a major component of the inflation spike in 2022 – inched higher last month, rising 0.5%. However, used car prices are down 1.8% year over year.
A pedestrian walks past a pre-owned car sales lot in Miami, Florida, on Jan. 12, 2022. (Chandan Khanna/AFP via / Getty Images)
But new car and truck prices inched 0.1% lower in February. Prices remain up 0.4% from the same time last year.
There’s another problem for car owners: rising insurance costs. Auto insurance jumped 0.9% in February, after rising the previous three months. On an annual basis, prices are up a stunning 20.6%.
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Travel and Transportation
Airline tickets continued to trend upward in February, rising 3.6% over the duration of the month.
A Southwest Airlines Boeing 737 Max 8 arrives at Daniel K. Inouye International Airport on Jan. 20, 2024, in Honolulu, Hawaii. (Kevin Carter / Getty Images)
The cost of tickets is down about 6.1% when compared with last year, according to the data.
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As we look ahead to 2024, many homeowners and prospective buyers are wondering what to expect when it comes to mortgage rates. The landscape of the housing market is constantly changing, so it’s important to stay informed about trends and predictions. In this blog post, we will discuss some factors that could impact mortgage rates in 2024 and what homeowners and buyers can expect.
One factor that could impact mortgage rates in 2024 is the overall state of the economy. If the economy is strong and growing, we may see higher mortgage rates as the Federal Reserve looks to combat inflation. On the other hand, if the economy is stagnant or in a recession, we may see lower mortgage rates as the Fed looks to stimulate growth. It’s important to keep an eye on economic indicators such as GDP growth, unemployment rates, and inflation to get a sense of where mortgage rates may be heading.
Another factor that could impact mortgage rates in 2024 is Federal Reserve policy. The Fed plays a key role in setting interest rates, and their decisions can have a ripple effect on mortgage rates. If the Fed decides to raise interest rates in response to inflation, we may see an increase in mortgage rates. Conversely, if the Fed decides to lower interest rates to stimulate growth, we may see a decrease in mortgage rates. Keeping up with the latest news and announcements from the Fed can give homeowners and buyers a sense of where mortgage rates may be heading.
In terms of specific cities and local mortgage companies, it’s important to note that mortgage rates can vary depending on location and lender. For example, in a city like New York City, where real estate prices are high, mortgage rates may be higher compared to a city like Indianapolis, where real estate prices are lower. Additionally, local mortgage companies may offer competitive rates and terms compared to national lenders. For example, in New York City, local lenders like Quontic Bank and CrossCountry Mortgage may offer specialized products and services tailored to the needs of local buyers.
It’s important for homeowners and buyers to shop around and compare rates from multiple lenders to ensure they are getting the best deal. Websites like Bankrate and LendingTree can be helpful resources for comparing rates and terms from multiple lenders. Homeowners and buyers should also consider working with a mortgage broker who can help them navigate the lending process and find the best mortgage product for their needs.
In conclusion, predicting mortgage rates in 2024 is not an exact science, but there are several factors that could impact rates. By staying informed about economic indicators, Federal Reserve policy, and local market trends, homeowners and buyers can make informed decisions about their mortgage. Shopping around and comparing rates from multiple lenders is key to ensuring you are getting the best deal on your mortgage. Whether you’re looking to refinance your existing mortgage or buy a new home, it’s important to stay informed and be proactive in managing your mortgage.
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