US Annual Inflation Slows to 2.4%

Inflation in the United States eased more than expected in January, raising hopes that the country’s persistent price pressures may be beginning to moderate.

The Consumer Price Index (CPI) rose 2.4% year-over-year, down from 2.7% in December, marking the slowest pace since the month following former President Donald Trump’s announcement of significant import tariffs.

Excluding volatile food and energy prices, core CPI increased 2.5% year-over-year, slightly below analysts’ expectations of 2.5% according to a Dow Jones survey.

On a monthly basis, headline CPI rose 0.2%, while core CPI climbed 0.3%, compared with forecasts of 0.3% for both measures.

The release of the report was briefly delayed due to a three-day federal government shutdown last week.

Alongside easing inflation, the labor market remains strong. The government reported faster job growth in January and a lower unemployment rate of 4.3%, down from 4.4% in December.

The Federal Reserve maintained its benchmark interest rate last month in the range of 3.50%–3.75%, keeping monetary policy steady as officials continue to monitor inflation and economic growth.

The Fed primarily targets the Personal Consumption Expenditures (PCE) price index to achieve its 2% inflation goal, and both core and headline inflation remain above that threshold, indicating that policy vigilance is likely to continue.