The U.S. inflation rate continues to show signs of cooling, dropping from 6.3% in January to 6% in February, according to the consumer price index released by the Bureau of Labor Statistics on Tuesday. The inflation rate peaked in June 2022 at 9.1%.
The price of goods and services increased 0.4% in February alone, with food and shelter prices remaining stubbornly high. The consumer price index weighs the costs of goods based on their importance. Items like food, shelter and energy tend to be weighted more heavily.
Food costs increased 9.5% in the 12-month period ending in February, which is down from 10.1% one month earlier. The price of shelter in the U.S. is up 8.1% in the last year, according to the government’s data.
Energy price increases have cooled to 5.2% in the last year.
While essentials have gone up, commodities such as apparel, electronics and appliances have not seen quite the same price jumps. These types of items have gone up by 1.1% in the last year.
The new data also indicates wages have failed to keep up with inflation as hourly wages have increased 4.6% in the last year, according to the Bureau of Labor Statistics. The gap between inflation and wages has closed some in recent months.
Federal Reserve Chair Jerome Powell said both rising wages and inflation will cause the Fed to continue raising interest rates. Powell said the Fed’s goal is to get inflation to an annual increase of 2%.
But recent two bank failures call into question how much longer banks can withstand the pressure of high interest rates. There have been calls among politicians to pause interest rate increases as a result of the bank failures.