Consumer prices rose slightly during President Trump’s first full month in office, according to data released Wednesday by the Labor Department.
The consumer price index (CPI) rose 0.2 percent in February from January, and is up 2.8 percent on the year.
Economists expected the CPI to rise by 0.3 percent on the month and hit an annual inflation rate of 2.9 percent, according to consensus estimates.
The numbers come following four consecutive months of rising annual inflation in the CPI, which increased steadily from 2.4 percent in September to 3 percent in January.
The rise prompted President Trump to declare in February that “inflation is back.” He quickly distanced himself from the upward trend in prices, saying he had “nothing to do with that.”
Consumer inflation as measured in the personal consumption expenditures (PCE) price index – which is the Federal Reserve’s preferred inflation gauge — eased in January after rising through the autumn, falling to a 2.5-percent annual increase from 2.6 percent in December.
The new CPI report comes amid weeks of rising economic pressure.
President Trump’s stop-and-go tariff announcements over the past few weeks have added uncertainty to economic conditions.
Trump imposed a 25 percent tariff on Canadian and Mexican goods earlier this month before exempting carmakers and then pausing it for goods covered under a North American trade agreement.
The president threatened tariffs on Canadian metal imports up to 50 percent after Canada imposed an electricity surcharge on its U.S. exports to New York, Minnesota and Michigan on Monday.
The White House declined to rule out a recession this week, fueling even greater anxiety in markets.
“We are in a period of economic transition,” White House press secretary Karoline Leavitt said Tuesday.
The Dow Jones Industrial Average of large U.S. companies has shed around 6.5 percent of its value over the past month. The S&P 500 index is down more than 7.5 percent over the past month, the Russell 2000 index of small-cap U.S. companies is down more than 10 percent, and the tech-heavy Nasdaq is down more than 11 percent.
The Atlanta Federal Reserve’s gross domestic product (GDP) forecast is also registering a contraction for the economy in the first quarter. It currently shows negative 2.4 percent growth.
Consumer sentiment as measured by the University of Michigan fell sharply in February, declining by 10 percent from February. It also showed year-ahead inflation expectations increasing from 3.3 to 4.3 percent, the highest reading since November 2023.
Long-run inflation expectations in the survey increased 0.3 percentage points to 3.5 percent, marking the largest month-over-month jump since May 2021.
Languishing sentiment among businesses is mirroring the feelings of consumers.
Uncertainty as measured by the National Federation of Independent Business (NFIB) hit its second highest reading ever in February, clocking in at an index score of 104, the group reported Tuesday.
The 12 percent of businesses reporting that it’s a good time to expand operation was down 5 percentage points from January, representing the largest monthly decrease in five years.
“Uncertainty is high and rising on Main Street and for many reasons,” NFIB economist Bill Dunkelberg said in a statement. “Those small business owners expecting better business conditions in the next six months dropped, and the percent viewing the current period as a good time to expand fell.”
