The Exceptions to the Rule

We’ve been highlighting some distinct medium- and longer-term trends in consumer prices lately: Energy prices have been markedly down. Service prices have been gaining while the prices of goods have not.

As we learned this morning with the monthly release of the Consumer Price Index, some of those trends took a vacation in February. 

The Labor Department reported the CPI was up 0.2 percent overall, the first such increase in four months.

Energy prices, which experienced a 9.7 percent decline a month ago, actually rose 1.0 percent in February.

Core goods, such as clothing, automobiles and recreational equipment, have been sizably down for the previous two months. But in February, they rose by 0.2 percent. One unlikely driver of the increase was a spike in used car sales, as well as a resilient market for medical products and prescription drugs.

And core services, which have been showing impressive gains in recent months, increased by just 0.1 percent in February.

“This month there does seem to be an odd mixture of ups and downs among the categories, with energy leading the pack. But the medium- and  longer-term trends we’ve been emphasizing seem to still be in place,” said Bob Hughes, senior research fellow at the American Institute for Economic Research.

One of those trends, he said, is core services accounting for most of the increases in the CPI, with housing, medical services and education leading the way.