Published on March 11, 2026 by Price Inflation Report

The Dry Take

Overall prices rose modestly in February 2026. The Consumer Price Index (CPI), which tracks what consumers pay for a broad basket of goods and services, increased 0.3% from January and is up 2.4% over the past year. Shelter remained the single largest driver of monthly price increases, rising 0.3% for the month and 3.3% annually. Food and beverages climbed 0.4% in February and are up 3% year-over-year. Apparel prices posted the largest monthly gain of any category at 1.3% (2.5% annually), followed by
medical care prices at 0.5% (3.4% annually). On the positive side, prices of communication services fell 0.5% in February and are down 2.2% over the year, and transportation costs remain slightly below the levels from a year ago (-0.5% annually).

What It All Means

For a typical American household, inflation is still present but running at a relatively contained pace. Rent, groceries, healthcare, and apparel costs continue to put upward pressure on budgets, while savings are available in phone and internet bills and at the gas pump and car dealership. With headline inflation at 2.4%, purchasing power is eroding more slowly than at any point during the peak inflation years of 2021–2023. Put simply, a basket of goods and services that cost $100 in February 2026 would have cost about $97.65 in February 2025.

A Cloud on the Horizon: The Iran Conflict and What to Watch in March 2026

The February CPI data was collected before the most severe effects of the ongoing Iran conflict took hold. Following U.S. and Israeli strikes on Iran in late February, Iran effectively closed the Strait of Hormuz — the passageway through which roughly 20% of the world’s daily oil supply flows — and oil prices surged from under $70 a barrel in February to nearly $100. Critically, a United Nations report warns that the disruption is raising not just energy prices but also food and fertilizer costs in ways that could intensify cost-of-living pressures for consumers. Increase in fertilizer costs will raise costs for farmers and consumers. Americans should watch the March 2026 CPI report closely for upward moves in energy, transportation, and food categories — the lagged effects of this supply shock will likely begin showing up in the data then.

Consumer Price Changes: February 2026

Data source

Consumer Price Index, U.S. Bureau of Labor Statistics

Written by Price Inflation Report