The February 2026 Consumer Price Index of All Urban Consumers (CPI-U) report indicates that inflation increased by 0.3% this month, up from the 0.2% rise in January. These data were released at 8:30 am EST on March 11, 2026, by the Bureau of Labor Statistics (BLS). Before seasonal adjustment, the year-over-year (Y-o-Y) inflation rate in the all-items index grew by 2.4%, matching the annualized figure from January.
It was a relatively uneventful CPI release as the figures aligned with economists’ consensus estimates. The table below is courtesy of Investing.com. The left column represents February’s figures, while the right column represents forecasters’ expectations. As you can see, there were no surprises in February.
Yet, with troubling developments unfolding in the Middle East, the recent spike in oil prices could derail investors’ hopes for future rate cuts. The only game plan is to observe how the drama unfolds, as a short-term disruption and a dramatic drop in Brent and WTI futures could facilitate further normalization. If not, and prices hover above $100 a barrel for a sustained period, the FOMC may face some tough choices over the next few months.
Food Prices
The food index rose by 0.4% MoM in February, double the monthly rate from January. Three major grocery indices increased this month, one was flat, and two decreased.
- Cereals and bakery products (-0.2%)
- Meats, poultry, fish, and eggs (+0.0%)
- Dairy and related products (-0.6%)
- Fruits and vegetables (+1.4%)
- Nonalcoholic beverages (+0.8%)
- Other food at home (+0.8%)
Back on track, the food away from home index increased by 0.3% in February (versus 0.1% in January), as restaurant inflation showcased strength once again.
Energy Prices
The energy index rose by 0.6% MoM in February after dropping by 1.5% in January. Gasoline prices rose by 0.8%, electricity fell by 0.7%, and natural gas jumped by 3.1%.
Core CPI
The February core CPI rose by 2.5% Y-o-Y, matching the 2.5% print from January and a decline from 2.6% in December. Below is an itemized breakdown of the various components:
- Shelter index: (+0.2%) [January: +0.2%]
- Rent index: (+0.1%) [January: +0.2%]
- Owners’ equivalent rent: (+0.2%) [January: +0.2%]
- Motor vehicle insurance: (-0.3%) [January: -0.4%]
- Medical care services: (+0.6%) [January: +0.3%]
- Physician services: (+0.3%) [January: +0.3%]
- Hospital services: (+0.6%) [January: +0.9%]
- Airline fares: (+1.4%) [January: +6.5%]
Seasonally Unadjusted CPI
Before seasonal adjustments, the CPI-U for February 2025 increased by 2.4% Y-o-Y to an index level of 326.785. Since these figures are unadjusted, they include regular seasonal price fluctuations that can create volatility in the results.
Unsettling Times
With the U.S.-Iran war creating chaos in the Middle East, it’s always sad when disagreements turn into armed conflict. And while the human impact is the most troubling, a potential economic fallout could occur as well.
The recent volatility in oil prices could hurt (or help) inflation, depending on the duration of the war and the disruption in oil flows. And with the event occurring at a time when the U.S. labour market faces its own uncertainty, the Fed’s dual mandate may conflict with one another.
To explain, the BLS revealed on Mar. 6 that the U.S. economy shed 92,000 jobs in February, and the recent rotation between positive and negative prints creates a fragile foundation for employment. Therefore, more bad data alongside higher oil prices could have labor and inflation heading in the opposite directions.
In contrast, ADP’s February Employment Report — which uses data from private businesses — came in at +63,000 on Mar. 4. An excerpt read:
“Hiring jumped in February, delivering the best showing for job gains since November 2025. Construction, education, and health services led the growth.” Chief Economist Dr. Nela Richardson, added, “We’ve seen an increase in hiring and pay gains remain solid, especially for job-stayers.”
Thus, resilient private and shaky public payrolls data only clouds the outlook for monetary policy.
To break the tie, it’s prudent to monitor U.S. Job Postings on Indeed. Since the data set updates weekly, it’s a more timely indicator of employment demand. And because the metric has trended higher since bottoming in November 2025, it supports ADP’s results more than the BLS, aligning with a more optimistic outlook for the U.S. labor market.
Turning to the financial markets, gold and silver have been caught in the recent volatility, as the prospect of an oil-induced recession is bearish for inflation-driven assets like precious metals.
However, research from J.P. Morgan highlights how Middle East conflict is typically bullish for gold.
To explain, the colored lines above track the performance of gold before, during, and after conflicts in the Middle East. If you analyze the middle of the chart, the number zero on the x-axis represents the beginning of each battle. During three of the four events, gold either rose immediately or was higher within the next 50 days. As a result, the yellow metal should remain a reliable portfolio hedge during this bout of uncertainty.
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Alex Demolitor is a Canadian financial writer hailing from Halifax, NS. Alex has a Bachelors Degree from King’s College and passed the CFA Exam Level III. He specializes in fundamental analysis of the stock, bond, commodity, and FX markets. He also covers US & Canadian economic indicators.
