The CPI rose 0.1% in February after a sharp increase in January. A drop in energy prices provided an offset for increases in food, apparel, shelter and medical services. Prescription drug prices receded a bit but remain on an upward trajectory. New and used vehicle prices dropped while producers continued to offer aggressive incentives on new vehicles. As sales near a peak, producers are offering deeper discounts in efforts to keep savvy consumers buying new vehicles. The core (nonfood and nonenergy) CPI rose 0.2% during the month, only one-tenth of a percent less than the increase last month.
The real issue is price increases measured from a year ago, which hit 2.7% in the overall CPI for February. That marks the fastest year-over-year increase in the overall CPI since early 2012, due in part to a low base one year ago.