The Bureau of Labor Statistics reported that the U.S. Consumer Price Index increased 0.3% in February. It was 2.4% in the last 12 months, which is unchanged from January. Markets did not like the data.
Shelter is still sticky inflation that increased by 0.2% M/M. More concerning is the index for food, which increased by 0.4%. The index for energy rose by 0.6%. After oil prices increased sharply in March, investors are increasingly concerned about an energy crisis. The U.S. economy previously benefited from low oil prices. That kept airline, cruise ship, and transportation costs low.
Investors now need to watch out for the index for airline fares, household furnishings, education, clothing, and medical care on the rise. Those items all increased in January. The drop in the index for communications, used cars, and trucks is notable.
Streaming services and mobile plan costs might continue to fall. Verizon (VZ) shares broke out in 2026, gaining 24.4%. BCE (BCE) in Canada is near a 52-week high, while AT&T (T) is slipping.
Vehicle sales will likely weaken considerably this year. Ford Motor (F) peaked at $14.50 and closed at $12.11. GM (GM) traded back at levels not seen since last December. The elevated CPI means that consumers have less to spend. They will most likely not buy luxury vehicles like a Mercedes-Benz (MBGAF) or a foreign vehicle made by Volkswagen (VWAGY).
