Core inflation stayed near 3%
U.S. core inflation held around 3%, a sign that price pressures remain sticky even as businesses plan investment and procurement. Sticky inflation forces buyers and finance teams to revisit assumptions about project costs and may influence CAPEX timing. (cnbc.com)
The inflation number the Federal Reserve cares about most is still stuck at 3%, not 2%, even after two years of rate hikes. In February 2026, the core personal consumption expenditures price index rose 3.0% from a year earlier and 0.4% from the prior month. (bea.gov) Core personal consumption expenditures is a long name for a simple idea: what people paid for most things they bought, with food and energy stripped out because gas and groceries can jump around from one month to the next. The Federal Reserve uses that measure as its main inflation target, and that target is 2% over time. (bea.gov, federalreserve.gov) The all-in version of that same index was 2.8% in February, so the “core” reading was hotter than the headline reading. That gap tells you the sticky part of inflation is no longer just oil or lettuce; it is showing up in the broader mix of services and everyday purchases. (bea.gov, bea.gov) The monthly pace is what keeps policymakers nervous. A 0.4% increase in one month is roughly the kind of pace that, if it kept repeating, would run well above the Federal Reserve’s 2% goal. (bea.gov) Consumers were still spending through it. Personal consumption expenditures rose by $103.2 billion in February, a 0.5% monthly increase, even as disposable personal income fell $18.3 billion, or 0.1%. (bea.gov) That combination matters because businesses set prices partly by watching demand. If households are still buying while incomes soften, companies get less pressure to cut prices and more room to pass through higher labor, rent, and financing costs. (bea.gov, federalreserve.gov) For finance teams, 3% core inflation is the difference between a budget that clears and one that slips. A factory upgrade priced at $50 million turns into a moving target when equipment, contractor bids, and service contracts keep repricing every quarter instead of settling down. (cnbc.com, bea.gov) It also leaves the Federal Reserve with less room to cut interest rates quickly. When the preferred inflation gauge is running a full percentage point above target, every rate cut risks looking premature unless growth or employment weakens much more sharply. (federalreserve.gov, bea.gov) One wrinkle in this report is timing. The February 2026 release came out on April 9, 2026, later than usual, because the Bureau of Economic Analysis said the report had been rescheduled after the October-November 2025 government shutdown. (bea.gov) So the number itself is not a shock, but the message is blunt: inflation is no longer falling in a straight line. At 3.0% core and 2.8% headline, the United States entered spring 2026 with price growth still running above the Federal Reserve’s comfort zone before any newer shocks had fully shown up in the data. (bea.gov, bea.gov)
