On the heels of the second and third largest bank failures in U.S. history, new federal data showing an ongoing easing of price pressures could help dampen concerns over a potential economic fissure.

On Tuesday, the Department of Labor reports year-over-year inflation dropped to 6% in February, down from January’s 6.4% rate and the smallest annual price increase since September 2021. While price increases on goods and showed easing on an annual basis, they still inched up .4% over January, according to the report.

The increasing cost of shelter was a primary driver behind the month-over-month increase, according to the department, while price hikes on food and recreation also contributed.

The Mountain West region, which includes Utah, continued to see the highest inflation rates in the country in February. Annual inflation came in at 6.7% for the region last month.

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Grocery prices were up 9.5% in February over the same time last year, the cost of shelter rose 8.1% and eating out was 10.2% more expensive than a year ago.

The new report comes just days after federal officials stepped in to cover depositors at two large banks, California-based Silicon Valley Bank and New York’s Signature Bank, after both institutions were closed following customer runs. Silicon Valley held $209 billion in assets when it was shuttered and Signature held $110 billion when New York regulators shut it down.

While both banks were outliers thanks to their very focused customer bases, tech sector for Silicon Valley and cryptocurrency for Signature, the surprise closures have roiled the banking industry and sent stock prices for financial institutions plunging. The closures have also driven heightened scrutiny of regional banks and particularly the amount of uninsured deposits as percentage of overall assets. Both Silicon Valley and Signature banks had unusually high numbers of accounts with deposits in excess of the FDIC’s $250,000 insurance limit, mostly due to their business-focused structures.

While inflation remains well above the Federal Reserve’s target rate of 2%, the monetary body is due to meet next week and some economists believe it may well take a break from its streak of eight straight rate increases going back to last year as it and other agencies seek stability after last week’s bank closures.

But just last week, Fed Chair Jerome Powell suggested to a Senate committee that if inflation didn’t cool, the Fed could raise its benchmark interest rate by a half-point at its meeting March 21-22, per the Associated Press. When the Fed raises its key rate, it typically leads to higher rates on mortgages, auto loans, credit cards and many business loans.

Banking sector issues aside, there’s plenty of data to suggest the Fed’s ongoing battle to quell inflation by slowing down a red-hot U.S. economy has found only moderate success.

The Labor Department’s monthly jobs report released last week found U.S. employers added 311,000 new positions in February, down from January’s whopping 504,000 but still outpacing economist’s expectations. While unemployment for the month ticked up to 3.6% from January’s 3.4%, the rate is still hovering near 50-year lows.

And, a metric closely watched by the Fed, the personal consumption expenditure price index, also ticked up more than expected in the latest report in January.

An unprecedented set of economic conditions has both battered and rewarded consumers over the past year and a half or so with record high inflation wreaking havoc on household budgets at the same time a robust jobs market has provided a wealth of new employment opportunities and robust wage growth.

But even with average hourly earnings bumping up by 5% over the last year, the extra cash has fallen short of inflation-driven price increases and, according to a February Deseret News/Hinckley Institute of Politics poll, concern is outpacing optimism when it comes to the personal economic outlook of most Utahns.

When asked to rate their feelings about the economy in the coming year, 54% of respondents statewide registered some level of pessimism, while 45% said they were very or somewhat optimistic about future economic conditions.

Ongoing U.S. inflation continued to be a significant red flag for most poll participants, with an overwhelming majority, 93%, saying the broad-based price increases are very or somewhat concerning and only 8% said they were only somewhat or not at all concerned with inflation.

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Those price increases are hitting home for Spanish Fork resident Clayton Dangerfield, who last month said he’s not holding out hope for things getting better any time soon.

“Inflation is off the hook,” he said. “Everything I do costs more. Property taxes, groceries, what I’m paying at the gas pump. The only thing that hasn’t gone up are my wages. I’ve had some increases but it’s not keeping up with prices.”

Dangerfield, 65, said he’s making ends meet but only by looking for deals and cutting back on some purchases.

“I’m always looking for deals, trying to find better prices on the commodities I use,” he said. “Everything has gone up ... and you need to be a little more aware of what you’re paying out the door. I’m OK to give up a little on quality to get a better deal.”

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