Consumer inflation in the United States slowed more than expected in January as energy prices declined, according to government data released on Friday.
The consumer price index rose 2.4 per cent year on year, down from 2.7 per cent in December and slightly below analysts’ median forecast, the Department of Labor said. It was the lowest reading since May 2025.
On a monthly basis, prices increased 0.2 per cent in January, easing from December’s 0.3 per cent rise.
Energy costs fell 1.5 per cent month on month, driven partly by lower gasoline prices, while food prices rose 0.2 per cent from December and were up 2.9 per cent from a year earlier.
Excluding food and energy, core inflation stood at 2.5 per cent, slightly below December’s level.
The data may give the Federal Reserve scope to cut interest rates later this year, although policymakers are likely to seek sustained evidence of easing price pressures before acting.
President Donald Trump welcomed the report, saying inflation was “way down” and back on track.
Economists cautioned that underlying pressures remain.
Navy Federal Credit Union chief economist Heather Long said the figures were encouraging for households, noting that gasoline, used cars and medical care costs declined in January.
She said tariffs had affected goods such as furniture and appliances, although broader price pressures appeared to be moderating.
KPMG chief economist Diane Swonk warned that distortions from a recent government shutdown may have dampened year-on-year comparisons and said goods prices were still rising.
She added that while wage growth has outpaced inflation on average in recent years, households are still adjusting to accumulated price increases.
The Federal Reserve cut interest rates three times last year but has since paused further moves as it seeks to bring inflation back to its 2 per cent target, amid a resilient labour market and lingering price pressures.
