Inflation has started to ease, very slightly. However, the most recent consumer price index, for February, still posted an increase well above the 2% pace the Federal Reserve has set as its goal. For February, the CPI rose 6% year over year, and 0.4% compared to the previous month.
One way the Bureau of Labor Statistics measures inflation is to back out food and fuel prices. Based on this yardstick, inflation rose 5.5% in February compared to the same month last year. This was the smallest year-over-year increase since December 2021. However, this approach can be misleading. Food and fuel prices are some of the stiffest cost of living headwinds Americans face. In February, fuel prices rose 5.2%, and food was up by 9.5%. (Here are countries with the lowest gas prices in the world at the start of 2023.)
Not all of the news about inflation was bad based on the February CPI data. 24/7 Wall St. reviewed the BLS’ Consumer Price Index Summary February report to find the items that have declined in price in February 2023 compared to February 2022. The prices of 27 items that make up the index fell. The largest drop was the price of smartphones, which fell 25.1%. Smartphones have had similar price drops for most months in the last year. But smartphones and some other such products are special cases.
The CPI generally compares similar items, large eggs to large eggs, for example. Smartphones, however, keep improving, and the newest models are often better versions of the previous year’s models. To reflect the technology improvements (better screen resolution for example), the BLS implements quality adjustments, discounting previous models to reflect their lower value. The drop in the CPI for smartphones, therefore, does not necessarily suggest that prices of smartphones are 25% lower than they were last year, but that the new smartphones provide 25% more value. (Here is the price of a dozen eggs every year since 1973.)
The inflation rate pace will need to be much more muted to get back to what it was for most of the last decade. So far, there is little sign it will get there soon.
Click here to see 27 household items that are actually getting cheaper since last year.
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27. Toys, games, hobbies and playground equipment
> Price increase, February 2022 to February 2023: -0.1%
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26. Men’s footwear
> Price increase, February 2022 to February 2023: -0.2%
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25. Women’s outerwear
> Price increase, February 2022 to February 2023: -0.4%
24. Oranges, including tangerines
> Price increase, February 2022 to February 2023: -0.4%
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23. Gasoline, unleaded midgrade
> Price increase, February 2022 to February 2023: -0.5%
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22. Car and truck rental
> Price increase, February 2022 to February 2023: -0.8%
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21. Services by other medical professionals
> Price increase, February 2022 to February 2023: -0.9%
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20. Moving, storage, freight expense
> Price increase, February 2022 to February 2023: -1.0%
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19. Boys’ and girls’ footwear
> Price increase, February 2022 to February 2023: -1.0%
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18. Recreational books
> Price increase, February 2022 to February 2023: -1.1%
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17. Citrus fruits
> Price increase, February 2022 to February 2023: -1.2%
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16. Clocks, lamps, and decorator items
> Price increase, February 2022 to February 2023: -1.3%
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15. Computer software and accessories
> Price increase, February 2022 to February 2023: -1.5%
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14. Uncooked beef steaks
> Price increase, February 2022 to February 2023: -1.9%
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13. Uncooked beef roasts
> Price increase, February 2022 to February 2023: -2.4%
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12. Gasoline, unleaded regular
> Price increase, February 2022 to February 2023: -2.5%
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11. Ship fare
> Price increase, February 2022 to February 2023: -3.2%
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10. Transportation commodities less motor fuel
> Price increase, February 2022 to February 2023: -3.2%
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9. Health insurance
> Price increase, February 2022 to February 2023: -4.7%
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8. Laundry equipment
> Price increase, February 2022 to February 2023: -5.1%
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7. Computers, peripherals, and smart home assistants
> Price increase, February 2022 to February 2023: -5.6%
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6. Bacon and related products
> Price increase, February 2022 to February 2023: -5.9%
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5. Education and communication commodities
> Price increase, February 2022 to February 2023: -10.5%
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4. Used cars and trucks
> Price increase, February 2022 to February 2023: -13.6%
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3. Televisions
> Price increase, February 2022 to February 2023: -14.8%
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2. Telephone hardware, calculators, and other consumer information items
> Price increase, February 2022 to February 2023: -18.3%
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1. Smartphones
> Price increase, February 2022 to February 2023: -25.1%
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