The numbers are in, and they’re not what you want to hear. The Core Personal Consumption Expenditures (PCE) Price Index for February 2025 just came in hotter than expected, jumping 0.4% month-over-month, well above the forecasted 0.3%. This isn’t just a blip on the radar. It’s a glaring signal that inflation is still rising, and there’s no sign of it slowing down anytime soon.
Year-over-year, the Core PCE is up 2.8%, just a tick higher than the expected 2.7%. While that might seem like a minor difference, it’s important to realize that the trend is what matters here. We’re not talking about one month of high inflation. This is a steady, ongoing rise that’s creeping into every corner of the economy. The cost of goods and services is inching upward, and that’s no accident. Inflation is on the rise, even though the broader economy seems to be sputtering to a halt.
Consumer spending grew by 0.4% in February. That’s lower than the projected 0.5%—yet another sign that people aren’t exactly opening their wallets the way they used to. This is exactly the kind of behavior you expect to see when the economy starts slowing down. But there’s one thing that doesn’t seem to be slowing down: inflation.
Personal income, on the other hand, saw a nice bump—up 0.8%, well above the expected 0.4%. But before we get too excited about that, remember that inflation is eating into these gains. It’s the classic catch-22. You might see more money in your paycheck, but it’s not going nearly as far as it used to.
What we’re witnessing here is stagflation, plain and simple. Inflation is rising while economic growth is stagnating—and we’ve been seeing these signs for over a year now. I’ve warned you about this scenario for a long time. It’s not a surprise, and it shouldn’t be one to anyone paying attention. This was set up long before any tariffs, and long before anyone in Washington tried to blame the previous administration. The truth is that the system was on shaky ground long before any trade policies were introduced.
Let’s not kid ourselves. The U.S. economy doesn’t just change direction on a whim. It’s massive, complicated, and takes time to react. The dominoes had to be in place months, if not years ago, before the inevitable fallout began. If you think this just happened overnight, you’re being gaslit.
Peter Schiff is right. President Trump tried to warn automakers not to raise car prices in response to his tariffs. But it was a losing battle from the start. Tariffs raise costs by definition, and those increased costs have to be passed on to the consumer. The reality is, if there’s more demand for U.S.-made products—like cars—higher prices are just the price of doing business. This is just one example of how these policies set the stage for what we’re seeing now.
In the end, it’s not just about one set of numbers or one month’s report. We’re dealing with a much larger issue, one that’s been building for some time and is now bearing down on us. Inflation is not going away. The economy is not going to just turn around overnight. This is going to take time—and it’s going to get worse before it gets better.
Sources:
https://www.cnbc.com/2025/03/28/pce-inflation-february-2025-.html
https://x.com/Mayhem4Markets/status/1905599516230726097
https://x.com/his_eminence_j/status/1905601462916219052
https://x.com/PeterSchiff/status/1905601185509224589