Inflation slowed in January as consumer prices rise 2.4% over prior year to start 2026

Inflation Overview - Inflation cooled more than expected in January, with the Consumer Price Index showing a 0.2% increase from the previous month and a 2.4% increase on an annual basis, marking a notable deceleration from December's 2.7% annual rise [1][3] Core Inflation - Core inflation, which excludes volatile categories like energy and food, rose 0.3% month-over-month and 2.5% year-over-year in January, meeting economists' expectations [2] Price Trends - Certain categories continue to experience elevated prices, such as food items like coffee and beef, which contributed to a 2.9% annual increase in that category. Airfares also saw a significant monthly increase of 6.5% [4] - Energy prices fell by 1.5% in January, while used car prices decreased by 1.8% month-over-month [4] Tariff Impacts - The effects of President Trump's tariffs are still being felt, with apparel prices rising 0.3% from the previous month. Other categories such as video and audio products increased by 2.2%, and computers and smart home assistants rose by 3.1% [5] - Analysts from Bank of America anticipate that core goods prices will accelerate due to increased tariff pass-through and the typical trend of January inflation being higher than the rest of the year [6]