The Bureau of Labor Statistics released the February Consumer Price Index data this morning. The year-over-year non-seasonally adjusted Headline CPI came in at 2.33%, down from 2.49% the previous month. Year-over-year Core CPI (ex Food and Energy) came in at 2.36%, up from 2.26% the previous month and above the Fed's 2% PCE target.

Here is the introduction from the BLS summary, which leads with the seasonally adjusted monthly data:

The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.1 percent in February on a seasonally adjusted basis, the same increase as in January, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 2.3 percent before seasonal adjustment.

Increases in the indexes for shelter and for food were the main causes of the increase in the seasonally adjusted all items index, more than offsetting a decline in the energy index. The food index increased 0.4 percent over the month, with the food at home index rising 0.5 percent, its largest monthly increase since May 2014. The index for energy fell 2.0 percent in February, with all of its major component indexes declining.

The index for all items less food and energy rose 0.2 percent in February, the same increase as in January. Along with the index for shelter, the indexes for apparel, personal care, used cars and trucks, education, and medical care
were among those that increased in February. The indexes for recreation and airline fares declined over the month.

The all items index increased 2.3 percent for the 12 months ending February, a smaller increase than the 2.5-percent figure for the period ending January. The index for all items less food and energy rose 2.4 percent over the last
12 months. The food index rose 1.8 percent over the last 12 months, while the energy index increased 2.8 percent over that period. [More…]

Investing.com was looking for a 0.2% MoM change in seasonally adjusted Headline CPI and a 0.2% in Core CPI. Year-over-year forecasts were 2.2% for Headline and 2.3% for Core.

The first chart is an overlay of Headline CPI and Core CPI (the latter excludes Food and Energy) since the turn of the century. The highlighted two percent level is the Federal Reserve's Core inflation target for the CPI's cousin index, the BEA's Personal Consumption Expenditures (PCE) price index.

Headline and Core CPI since 2000

The next chart shows both series since 1957, the year the government first began tracking Core Inflation.

Headline and Core CPI

In the wake of the Great Recession, two percent has been the Fed's target for core inflation. However, at their December 2012 FOMC meeting, the inflation ceiling was raised to 2.5% while their accommodative measures (low Fed Funds Rate and quantitative easing) were in place. They have since reverted to the two percent target in their various FOMC documents.

Federal Reserve policy, which in recent history has focused on core inflation measured by the core PCE Price Index, will see that the more familiar core CPI is now at the PCE target range of 2 percent.

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