US inflation dropped to 2.4% in January after last year’s tariff-driven price swings. Prices rose 0.2% from December, while core inflation increased 0.3%. Economists had expected a slightly higher annual rate of 2.5%.
Inflation moved sharply during the previous year. It hit 2.3% in April, climbed to 3% by September, and settled at 2.7% late in the year. The White House called the new figure proof that its economic policy controls inflation.
Investors now watch for signals on interest rates. The Federal Reserve paused cuts in January and will decide again in March. Jerome Powell said tariff effects still pass through the economy but should peak and then decline.
The labor market remained stable in January, although overall job growth slowed in 2025. The economy added far fewer jobs than in 2024. Trump highlighted GDP growth and price stability and praised his first-year performance.
Recent polls show falling voter support, especially on inflation. This trend worries Republicans before the midterm elections. The administration has proposed new measures to reduce housing costs, credit card debt, and drug prices.
