An easing in prices of services has been key, said analyst Gargi Chaudhuri of BlackRock, financial and investment adviser, in an email. “February’s core CPI suggests that January’s hot print was a deviation from the longer-term disinflationary trend.”
Atlanta’s inflation rate peaked at 11.7% in mid-2022, significantly higher than the national average. However, as prices slid lower, Atlanta’s inflation rate has more frequently been similar to that of the overall United States.
The national average for February was 3.2%, according to the BLS.
“Early in the pandemic, we saw more housing inflation in Georgia than we saw in other parts of the country,” said economist Daniel Hornung, a member of the White House National Economic Council. “But now we are seeing how it’s come down more quickly there. There’s been significant new construction around Atlanta.”
While rents have largely leveled off or even declined, home prices and mortgage payments have risen. Over the year, costs of shelter in metro Atlanta’s inflation calculation are still up 6.1%, according to the BLS.
The Federal Reserve aggressively lifted its benchmark interest rate in an effort to tame inflation. Those higher interest rates add to costs for borrowers, including for businesses or those taking out auto loans and mortgages, as well as using credit cards. Tighter monetary policy should temper economic activity and help rein in prices, and the Fed has said repeatedly it is aiming at a 2% annual rate of inflation.
But Fed officials have said they are reluctant to lower interest rates until they are convinced that the target is in sight.
Inflation dropped convincingly for more than a year, raising hopes that the Fed would soon start cutting interest rates. But trimming price growth down to 2% has proven difficult. Wells Fargo economists said in an online post Tuesday they now expect the first cut will not come until summer.
The economy overall has sped forward despite the high rates,…
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