US inflation dropped to 2.4% in January after last year’s tariff-driven price swings. The consumer price index rose 0.2% from December, while core inflation increased 0.3%. Economists had expected a slightly higher annual rate.
Prices moved sharply in 2025. Inflation fell to 2.3% in April, climbed to 3% by September, and eased to 2.7% by year’s end. The White House said the new figure proves its economic agenda controls inflation and dismissed lasting tariff effects.
Investors watch the data for interest rate signals. The Federal Reserve paused cuts in January and will decide again in March. Jerome Powell expects tariff effects to lift goods prices once before they stabilize.
The labor market stayed firm, but job growth slowed. The economy added 181,000 jobs in 2025 after revisions, far fewer than in 2024. Trump highlighted GDP growth and price stability, yet polls show weak approval, especially on inflation.
These numbers concern Republicans before the midterms. The administration has begun promoting measures to reduce housing costs, credit card debt, and drug prices.
