It rose 4.5% in three months, which experts said supported deferring rate reduction. Others saw the high reading as a result of January's price rise, which they argued did not change the trend.
"The six drivers of the surge in core inflation in 2021-to-22 - expanding margins, rapid wage gains, exploding rents, supply chain chaos, and pass-through from higher global food and energy prices - have all normalized or are in the process of normalizing, with no real signs of any reversal," said Ian Shepherdson, CEO of Pantheon Macroeconomics.
"That means the fundamental pressure on inflation is to the downside, but odd things can happen in individual months without changing the bigger picture."
Over two-thirds of U.S. economic activity comes from consumer spending, which rose 0.8% last month. That was the biggest growth since January 2023, following a 0.2% January rise. When adjusted for inflation, consumer spending rose 0.4% after falling 0.2% in January.
Real consumer expenditure rose, suggesting first-quarter consumption held steady. That led the Atlanta Fed to anticipate 2.3% GDP growth this quarter, up from 2.1%.
Despite a 1.5% goods trade deficit widening, Census Bureau statistics showed wholesale and retail inventories expanding rapidly in February, boosting growth prospects.
Many of the expenditures was covered by savings as income rose 0.3% after rising 1.0% in January due to a Costco Wholesale Corporation special dividend. Household income declined 0.1% after inflation and taxes. From 4.1% in January, the saving rate fell to 3.6%, the lowest since December 2022.
"As long as employment growth remains strong, it can underpin solid spending, but consumers are not prepared for a labor market weakening," said Nationwide chief economist Kathy Bostjancic.
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