CPI Holds at 2.4% YoY in February 2026, Core Steady at 2.5%

Inflation showed little sign of breaking from its recent holding pattern in February 2026, with the Consumer Price Index for All Urban Consumers rising 0.3 percent on a seasonally adjusted basis — a modest pickup from January's 0.2 percent gain. Over the prior 12 months, the all-items index advanced 2.4 percent, unchanged from the rate reported for January, suggesting that disinflation has stalled rather than resumed its earlier progress toward the Fed's 2 percent target.

Headline vs. Core: A Rare Moment of Convergence

February's print was notable for how closely headline and core inflation tracked each other. The index for all items less food and energy — the core measure — rose 0.2 percent for the month, a slight deceleration from January's 0.3 percent gain. On a year-over-year basis, core CPI held at 2.5 percent, identical to the January reading. Headline CPI, at 2.4 percent annually, sat just 0.1 percentage point below core — an unusually narrow gap that reflects the fading of the large energy price swings that dominated 2022 and 2023.

Food added upward pressure, with the food index rising 0.4 percent in February, matching January's pace. The food away from home index climbed 0.3 percent and is now up 3.9 percent over the past year — a persistent drag on household budgets that runs well above the headline rate. Within grocery store categories, fruits and vegetables jumped 1.4 percent and candy and chewing gum surged 3.7 percent, while dairy and related products fell 0.6 percent. One notable data point from the release: the eggs index has fallen 42.1 percent over the past 12 months, even as the broader meats, poultry, fish, and eggs category eked out a 0.4 percent annual gain — a reminder that within-category volatility can obscure the headline figure.

Shelter Holds Firm, But Rent Posts Its Smallest Monthly Gain Since 2021

Shelter — the single largest component of CPI at roughly 36 percent of the index — rose 0.2 percent in February and was the biggest contributor to the monthly all-items increase. Over the past 12 months, shelter is up 3.0 percent, a rate that remains well above the pre-pandemic norm but has been trending lower since its 2023 peak.

The most consequential detail within shelter is the rent of primary residence index, which increased just 0.1 percent in February — the smallest single-month gain since January 2021. Owners' equivalent rent also rose 0.2 percent. While a single month does not confirm a trend break, this reading is consistent with the real-time rental data that has pointed toward shelter disinflation for over a year. If rent continues to decelerate at this pace, shelter's contribution to core CPI could diminish meaningfully in the months ahead.

Lodging away from home moved in the opposite direction, rising 1.0 percent for the month, partially offsetting the softness in primary rent.

Notable Movers: Apparel Surges, Used Cars and Motor Vehicle Insurance Retreat

Several categories posted outsized moves in February that deserve attention beyond the headline figures.

• Apparel jumped 1.3 percent over the month, following a 0.3 percent gain in January. The February surge likely reflects seasonal pricing dynamics and potentially early pass-through from tariff-related cost pressures on imported goods — though the BLS press release does not attribute the move to any specific exogenous factor.
• Airline fares rose 1.4 percent in February, extending recent volatility in transportation services, which are up 2.2 percent over the past year.
• Medical care increased 0.5 percent for the month, with hospital services up 0.6 percent and physicians' services up 0.3 percent. The medical care index is now 3.4 percent above year-ago levels — one of the more persistent above-target components in core services.
• Used cars and trucks fell 0.4 percent in February and are down 3.2 percent year over year, continuing their multi-year retreat from pandemic-era highs.
• Motor vehicle insurance declined 0.3 percent and communication fell 0.5 percent, providing modest offsets to upside pressure elsewhere.
• Energy rose 0.6 percent in February after falling 1.5 percent in January. Natural gas (piped utility service) climbed 3.1 percent for the month and is up 10.9 percent year over year, while gasoline rose 0.8 percent on a seasonally adjusted basis but remains 5.6 percent below its year-ago level.

A technical note from the BLS: October and November 2025 data values are not available due to a lapse in appropriations during that period. This gap affects the monthly trajectory tables but does not alter the February 2026 index levels or year-over-year comparisons, which are calculated from February 2025 unadjusted data.

Year-Over-Year Trend: Disinflation Has Stalled at the 2.4–2.5% Level

The 12-month all-items rate has now held at 2.4 percent for two consecutive months, while core has been anchored at 2.5 percent over the same span. This plateau is occurring at a level that remains above the Fed's 2 percent PCE inflation target — and since CPI typically runs roughly 0.3 percentage points above core PCE, a 2.5 percent core CPI reading implies core PCE is running somewhere in the 2.2 percent range, still above target.

The composition of remaining inflation has shifted. Energy, which drove headline CPI sharply higher in 2022 and then provided significant relief through 2023–2024, is no longer a meaningful disinflationary tailwind — the energy index is up 0.5 percent over the past year. Food at home, at 2.4 percent annually, is running in line with the headline. The remaining inflation is now concentrated in services: shelter at 3.0 percent, medical care at 3.4 percent, and food away from home at 3.9 percent. These are the categories most sensitive to labor costs and least responsive to interest rate policy in the short run.

The next CPI release, covering March 2026, is scheduled for Friday, April 10, 2026. The critical data point to watch will be whether the rent of primary residence index sustains its deceleration below 0.2 percent monthly — a second consecutive soft reading would provide stronger evidence that shelter disinflation is finally feeding through to the official index, which would be the clearest signal yet that core CPI has room to move durably below 2.5 percent.