Consumer prices increased 2.8% in February compared to a year ago, decreasing a bit during the first full month under President Donald Trump and offering welcome news for markets unfortunate by a global commercial war. Inflation cooled more than economists expected.
The main rates of shares rose in early negotiation on Wednesday, minutes after the inflation report, but the markets soon staggered in the middle of a growing commercial war and recession concerns.
Price increases slowed down an inflation rate of 3% recorded in January, although inflation remains almost a higher percentage point than the 2% federal reserve objective.
Egg prices, however, a symbol of the price increases observed closely, shot 58.8% in February compared to a year ago, accelerated from the previous month. The avian flu has decimated egg supply, raising the highest prices.
The Department of Justice opened an investigation into egg producers to know if market practices have contributed to price increases, said a source familiar with the matter to ABC News.
Prices fell to tomatoes, cereals, cakes and cookies during the past year. However, some edible prices increased faster than the rhythm of general inflation, including beef, cookies and apples.
An increase in housing costs represented almost half of the price increases last month, said the US Labor Statistics Office. A decrease in the price of airline tickets and gasoline helped compensate some of the biggest costs, the agency said.
The inflation report came hours after the United States imposed 25% tariffs on steel and aluminum, which caused almost imminent retaliation tasks of the European Union and marked the last climbing of commercial tensions.
Tariffs are expected to increase prices for consumers, since importers generally transmit an additional cost for buyers.
The stock market has collapsed since Trump imposed tariffs on Mexico, Canada and China last week, leading to warnings in Wall Street on a possible economic recession. In a matter of days, Trump delayed some of the rates in Canada and Mexico.
Wednesday’s report can soften the pressure on the Federal Reserve, which has the responsibility of maintaining inflation under control.
The president of the Federal Reserve, Jerome Powell, last week said that the administration tariff plan would probably increase prices for American buyers and retailers
The scale and duration of the rates are still clear, but a part of import taxes will probably reach consumers, Powell told an economic forum in New York City last week.
“We are in a stage where we are still very insecure of what will be tariff, for how long, at what level,” Powell said. “But the probability is that your way will be. It will reach exporters, importers, retailers and, to some extent, consumers.”
On multiple occasions in recent days, the White House refused to rule out a possible recession, saying that tariffs would require a “transition period.”
A worker moves the steel product in North York Iron, a steel supplier in Toronto, Ontario, Canada, on February 11, 2025.
Cole Bursston/AFP through Getty Images
A solid job report, although disappointing, on Friday exacerbated concerns among some observers.
Employers hired 151,000 workers last month, not reaching expectations of 170,000 added jobs. The unemployment rate increased up to 4.1%, which remains a historically low figure.
The Trump administration slapped 25% of the assets of the goods of Mexico and Canada, as well as 10% of the imports of China imports. The new round of duties on Chinese products doubled an initial set of rates placed in China last month.
A day later, Trump issued a one -month delay for tariffs on goods related to Mexico and Canada’s car. The taller expanded shortly after with an additional pause of one month for goods from Mexico and Canada that complies with the United States-Canadá, or USMCA agreement, a free trade agreement.
On Tuesday, Trump announced plans to add another 25% tariff on the steel and Canadian aluminum, which raises the total of 50%. The measure occurred in response to the threats made by Ontario to cut electricity to the United States, Trump said.
Hours later, Ontario Prime Minister Doug Ford issued a joint statement with the United States Secretary of Commerce, Howard Lutnick, in X announcing the suspension of the 25% electricity surcharge sent to the United States
It is expected that the rates slapped to Canada, Mexico and China will increase the prices paid by US buyers, since importers generally transmit a part of the cost of those higher taxes for consumers.
A key indicator of consumer confidence registered its greatest monthly fall since August 2021, said the Board of the Non -Party Conference in February.
The proportion of consumers waiting for a recession within next year increased to a maximum of nine months, according to the data. A growing part of consumers believes that the labor market will make it worse, the stock market will decrease and interest rates will increase, the report added.
Katherine Faulders and Soo You of ABC News contributed to this report.
