(The Center Square) – Newly released federal inflation data showed prices rose faster than expected in February, contradicting federal data from earlier this month.
The Bureau of Economic Analysis released the Personal Consumption Expenditures Index, a key marker of inflation, which showed a modest increase of 0.3% in February, albeit more than experts expected.
More consumer spending on goods and services in February helped drive up the PCE.
“Core PCE inflation came in a little above the already high expectations in Feb,” Harvard economist Jason Furman wrote on X. “The pattern is the opposite of what you want to see–the shorter the window the higher the annualized rate (and still high at 12 months).”
Furman said that price increases could be partially attributed to companies bracing for President Donald Trump’s tariffs, which are expected to begin in earnest April 2.
“The issue in recent months has been in both core goods inflation (which could have some tariff, and tariff anticipation effects), but also in core services (which has much less passthrough from tariffs, although still some),” Furman continued.
The PCE data came in hotter than other federal inflation data, like the Bureau of Labor Statistics data released earlier this month which showed annual inflation slightly decreased.
The BLS data reported that a decline in energy costs had driven down overall consumer inflation.
“February PCE Price Index: inflation improvement has stalled out,” economist Joseph Brusuelas wrote on X. “The notion of stubborn and sticky inflation is the primary narrative here in advance of the greater trade shock that will show up in the hard data in coming months. The second round effects are going to be key here going forward.”
