ORLANDO, Fla. – It seems that stubborn inflation appears to be cooling off.
The government just released its latest consumer price index. CBS News business analyst Jill Schlesinger, spoke with News 6 Anchor Lisa Bell to break down the February data:
Schlesinger: Well, it was actually better than expected so I like good news, too. The inflation rate retreated a little bit. It it was up by 2.8% from a year ago, down from the previous month’s reading of 3%. Now, that core rate, that’s the one that removes food and energy, that was up 3.1%, again, an improvement from the 3.3% annual pace in January. Inside this report, I know we talk about eggs ad nauseum, that egg number is kind of crazy, up by more than 10% in a month. Eggs are up by 58% from a year ago. The only one happy about that are cardiologists. But more importantly, in the good news category, the Shelter Index, which eats up a lot of a household budget, is down to levels that we have not seen since 2021. So I think we should concentrate on some of the good news here and just avoid our eggs.
Bell: So is that a sign that housing prices and rental prices are starting to come down a bit?
Schlesinger: Yeah, it’s when people are renewing leases right now, they are actually renewing them at a lower pace than they were, say six, 12, 18 months ago. So that’s really what’s happening here.
Bell: All right. Let’s talk about Wall Street now. And we have seen really a nosedive over the past few weeks. What is going on?
Schlesinger: You know, there’s just so much uncertainty, right? Investors are worried about how these on again off again tariffs could push up prices. So we could see the inflation rate start to creep up from this two and a half or 3% level. Maybe we go to three and a half or 4%? Now, it doesn’t seem terrible considering that we endured much higher inflation rates in the Covid opening. But when you have prices go up, it can slow down the economy. And I guess the fear among investors is really that we will trigger a recession. Now, gang, we are not in a recession right now. I also want to reiterate that recessions are part of the normal business cycle. They occur from time to time. So if you look back 60 years, there have been eight recessions. They vary in length. We can have long and terrible recessions like the Great Recession, 2007 to the middle of 2009 lasted 18 months. But the most recent recession, the Covid recession, was five years ago. It lasted just two months. We will have a recession. We’re not in one right now. But what investors are worried about is if the economy starts to shrink, companies can’t make money. That’s why stocks are on this roller coaster and mostly pointing lower right now.
Bell: Yeah. When you see those big drops, it certainly can be scary for a lot of people. We know you always advise people to not make any rash decisions when it comes to your money. But what if you’re at a critical time, like getting your retirement or needing to pay for something big like college? What should you do?
Schlesinger: I think it’s important to distinguish between those two categories that you just brought up. So let’s talk about someone who needs money within the next year. So like you said, maybe it’s a tuition payment. Maybe, you know, you need a car. Maybe you owe your contractor money because there’s a big hole in the kitchen right now. Whatever you need within the next 12 months, that is money that should not be invested in anything that can go down. So that means no stocks, no bonds, no crypto should be out in a safe account. But let’s think about if you’re nearing retirement, okay. You’re 55. You’re 60, even 65 years old. You’re worried because you say, I can’t afford to lose money, I’m going to retire. But there’s an asterisk here because the money you invest for retirement, that has to last well beyond the day you stop working. In fact, think about it. It has to last probably 20 or 30 years? So yes, even if you are nearing retirement, you’re still a long term investor. You know what? It’s really hard to endure these market pullbacks. And it’s scary. I get it. But this is the price of admission if you want to be a long term investor. So you know you buckle up. You stick to your game plan. You replay this segment over and over. If you need a little calm.
You can see Jill regularly on CBS mornings and the CBS Evening News.