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January 2026 CPI Report Inflation: Inflation slowed more than forecast in January, new figures released Friday by the show.
The Consumer Price Index rose 0.2 percent from the previous month. That increase was smaller than many analysts had predicted.
Compared with a year earlier, prices were up 2.4 percent. The annual rate eased from 2.7 percent in December.
Economists polled by had expected a 0.3 percent monthly gain. They also projected the yearly figure would reach 2.5 percent.
The latest data indicates that inflationary pressures moderated at the start of the new year.
Core inflation continued to ease in January, according to newly released federal data.
Excluding food and energy, which often fluctuate sharply, prices increased 0.3 percent from the previous month.
On a year-over-year basis, core prices advanced 2.5 percent.
Both readings were in line with market expectations. The annual core figure was the lowest recorded since March 2021.
The January data reflected a noticeable improvement compared with December. It also marked the second positive economic signal of the week.
Earlier figures from the showed the unemployment rate declined at the start of the year.
Employers added jobs at roughly double the pace economists had forecast.
Taken together, the data suggests inflation pressures are cooling while the labor market remains resilient.
January’s overall inflation reading came in slightly below forecasts, providing an early-year boost for policymakers and investors, according to Bernard Yaros of .
Yaros, the firm’s lead economist, described the softer headline Consumer Price Index figure as a positive development.
He noted that January has frequently produced stronger-than-expected inflation readings in recent years.
Those surprises were often linked to seasonal distortions that lingered in the data.
Businesses were also adjusting prices in response to supply disruptions that followed the pandemic. This time, those pressures were not as pronounced.
Yaros said the latest figures reinforce the view that price increases tied to earlier tariffs on goods have largely faded.
While overall inflation has moderated, some everyday expenses remain stubbornly high in early 2026.
Grocery bills continue to reflect elevated costs. Prices for products such as coffee and beef have climbed sharply over the past year.
As a result, the broader food index was up 2.9 percent compared with January a year earlier.
Air travel became significantly more expensive during the month. Airfares surged 6.5 percent from December, adding pressure for travelers.
Other categories offered some relief. Energy prices declined 1.5 percent on a monthly basis.
Used vehicle prices also moved lower, falling 1.8 percent from the previous month.
The data highlights a mixed inflation picture, with easing pressures in some sectors and persistent increases in others.
The January report also drew attention to the lasting economic effects of broad tariffs enacted during the administration of President .
Much of the added cost from those import duties was absorbed by businesses and ultimately passed on to consumers last year.
Several tariff-sensitive categories recorded price gains at the start of the year.
Clothing prices rose 0.3 percent from December. Video and audio equipment increased 2.2 percent.
Prices for computers and smart home devices climbed 3.1 percent. Laundry appliances advanced 2.6 percent over the month.
Economists at said in a recent note that they anticipated a pickup in core goods inflation compared with December.
They cited stronger tariff pass-through effects as one factor.
They also noted that January inflation data often runs firmer than other months due to seasonal pricing patterns.
Core goods prices showed no movement in January, according to the latest data.
That stability suggests import duties were not a major driver of inflation during the month.
Paul Ashworth, chief North America economist at , said the flat reading indicates tariffs had little impact on the overall rise in core inflation.
He added that there were no signs of unusually sharp goods price increases at the start of the year.
The data points to other components, rather than merchandise costs, as the primary contributors to January’s core inflation gain.
Image: AI‑generated illustration, created and published by AD News Live.
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