Inflation Figures Show Smallest Yearly Increase in Housing Index Since 2021

The latest inflation numbers were hardly reflective of tariff anxieties, which have sent the stock market into a frenzied period of selloffs in recent weeks.

The consumer price index (CPI) for all items rose 2.8 percent for the 12 months ending in February, which was a slight decrease from the 3 percent increase seen over the 12-month period that ended in January, according to the U.S. Bureau of Labor Statistics (BLS).

Housing in general saw a 4.2 percent increase from February 2024 to February 2025, and also notched a 0.4 percent increase from January, according to the CPI report from the federal agency released Wednesday. It was the smallest 12-month increase since December 2021 in the CPI’s shelter index, a measure of the cost of housing services usually equivalent to a month’s rent.

While the rate of inflation eased a small amount, inflation-adjusted average hourly earnings rose by an even smaller amount: 0.1 percent for February and 1.2 percent from the same period last year, according to a separate report from the BLS that was also released Wednesday morning.

While President Donald Trump has been threatening tariffs against trade partners Canada and Mexico as well as China and those in Europe, it wasn’t until March 4 that the first tariffs were implemented. Additional tariffs have been imposed since then, including a 25 percent import tax on Canadian steel and aluminium that took effect Wednesday.

The construction industry has been bracing for impact from the tariffs, looking for alternative sources for materials from within the U.S. while Canadian suppliers are looking for alternative buyers, upending traditional supply chains.

“I know a lot of the housing associations, and Canada as well, have come to Trump and said, ‘We are looking for more affordable housing,’ and here we are jacking up the prices of lumber and steel, necessary materials that we need,” Margaret Rabba, vice president of engineering and construction at Morningstar, told Commercial Observer in February. “So it’s not something that anybody wants to be dealing with at this point, especially when housing is at the top of the political agenda.”

Europe and Canada have retaliated with their own tariffs, with Ontario Premier Doug Ford on Tuesday actually backing down — for now — on 25 percent tax on electricity sold to the U.S. and consumed primarily in New York.

Canada has imposed a fee on steel imports into Canada worth about $8.8 billion, and retaliatory tariffs amounting to about $20 billion are set to go into effect Thursday.

Trump has been easier on partners south of the border after holding talks with Mexican President Claudia Sheinbaum, which — again, for now — allowed an exception for auto parts and other goods.

Mark Hallum can be reached at mhallum@commercialobserver.com.