US inflation dropped to 2.4% in January after last year’s tariff-driven price swings. The consumer price index rose 0.2% for the month, while core inflation increased 0.3%. Economists had expected a slightly higher annual rate of 2.5%.
Prices moved sharply during the past year. Inflation hit 2.3% in April, climbed to 3% by September, and eased to 2.7% by late autumn. The White House called the new figure proof that its economic agenda controls inflation and dismissed tariff-related spikes.
Investors now watch the data for signals on interest rates. The Federal Reserve paused cuts in January and will decide again in March. Chair Jerome Powell expects tariff effects to push prices up once before they stabilize.
The labor market remained stable in January, but overall job growth slowed to 181,000 in 2025 after revisions, down from two million in 2024. Trump highlighted GDP growth and price stability, yet new polls show falling approval, especially on inflation.
Republicans face pressure before the midterms because voters still worry about high prices. The administration has recently proposed measures on housing costs, credit card debt, and drug prices.
