The Partnership sends updates for the most important economic indicators each month. If you would like to opt-in to receive these updates, please click here.

Estimated Reading Time: 2 minutes

Inflation in the Houston region eased in February. Local consumer prices, as measured by the Consumer Price Index for All Urban Consumers (CPI-U), rose 1.3 percent between February ’25 and February ’26, down from the 1.6 percent annual increase recorded in December. By comparison, the national inflation rate held steady at 2.4 percent, putting Houston 1.1 percentage points below the U.S. average. Still, inflation could heat up in March as the conflict with Iran and closure of the Strait of Hormuz put upward pressure on oil and gasoline prices.

At 2.4 percent, U.S. inflation came in exactly in line with economists’ expectations in a recent Wall Street Journal survey. Core inflation, which excludes food and energy, also matched expectations, registering at 2.5 percent. For the Federal Reserve, however, the policy picture remains complicated. Although the weaker-than-expected February jobs report would typically bolster the case for an interest rate cut, surging energy prices in March are a reminder that inflation pressures remain. That leaves the Fed likely to hold rates steady at its March meeting.

Houston’s lower inflation rate compared to the U.S. extended across nearly every major category of goods and services. Apparel and recreation were the only areas where local prices rose faster than the national average, while prices for restaurant meals (i.e. food away from home) increased at the same rate. Elsewhere, Houston consistently outperformed: prices for groceries (i.e. food at home), shelter, furnishings, medical care, and miscellaneous goods and services rose more slowly than they did nationwide; prices for alcoholic beverages, new vehicles, and education services fell locally even as they rose nationally; and prices for used vehicles and gasoline declined faster here than in the U.S. as a whole.

The next release of CPI data will be on Friday, April 10.

Colin Baker
Manager of Economic Research
[email protected]

Clara Richardson
Research Analyst
[email protected]