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This story on the January 2026 CPI inflation report is developing and will be updated with more details.
Inflation remained high in January as the pace of consumer price growth remained above the Federal Reserve’s target rate, while policymakers worried about affordability.
The Bureau of Labor Statistics said Friday that the consumer price index (CPI) — a broad measure of the cost of everyday goods such as gasoline, groceries and rent — rose 0.2% month-over-month in January and fell to 2.4% year-over-year. That was slightly lower than the 2.7% in December.
Expectations versus reality
Both figures were slightly cooler than expectations from economists surveyed by LSEG, who forecast a monthly gain of 0.3% and a 2.5% increase from a year ago.
So-called core prices, which exclude volatile measures of gasoline and food to better assess price growth trends, rose 0.3% from the previous month, slowing to 2.5% from a year ago from 2.6% last month. These figures were in line with economists’ expectations.
Economists have noted that inflation data from December 2025 through April 2026 will be affected by data collection disruptions caused by last fall’s 43-day government shutdown.
As a result of the shutdown, the BLS was unable to collect data and used a carry-forward methodology to compensate for the lack of an October CPI report and missing data in the November report. Going forward, economists say this will likely have a downward impact on inflation rates until this spring, when new data will negate the discrepancy.
The distribution of the costs of living
High inflation in recent years has put severe financial strain on most American households, who are forced to pay more for daily necessities such as food and rent. Price increases are especially difficult for lower-income Americans, because they tend to spend more of their already tight paychecks on necessities and have less flexibility to save.
Food prices rose by 0.2% in January and are 2.9% higher than a year ago. The eating at home index rose 0.2% this month and is 2.1% higher than last year, while the eating away index rose 0.1% in January and is 4% higher than a year ago.
Prices for meat, poultry and fish rose 0.7% in January and were 7% higher than a year ago. Beef prices fell 0.4% this month, but are up 15% from last year. Egg prices continued to fall after an outbreak of bird flu affected supply, with prices falling 7% this month and 34.2% year-on-year. The index for fruit and vegetables fell by 0.6% on a monthly basis and has only increased by 0.2% compared to last year.
Energy prices fell 1.5% this month and have fallen 0.1% over the past year. Gasoline prices fell 3.2% this month and are down 7.5% year over year. Utility gas prices rose 1% in January and are up 9.8% year-on-year, while electricity costs fell 0.1% this month but are up 6.3% year-over-year.
House prices rose by 0.2% in January and are up 3% year-on-year. The BLS noted that the increase in the shelter index was the largest factor in the overall CPI increase in January. The cost of renters and home contents insurance fell by 0.1% in January, but increased by 6.9% compared to last year.
Costs for transportation services increased by 1.4% in January and are 1.3% higher than a year ago. Airline fares rose 6.5% this month and are 2.2% higher than last year. Motor vehicle maintenance and repair costs are 4.9% higher than last year, after an increase of 0.1% in January.
Medical care costs rose 0.3% in January and 3.9% last year. The personal care index, which includes haircuts and similar services, rose 0.6% in January and is 5% higher than a year ago.
The home furnishings and supplies index rose 0.3% in January, making it 3.8% higher than a year ago. Furniture and bedding costs increased 0.7% month over month and 4% year over year. Tools, hardware and supplies rose 1% in January and are 6.4% higher than a year ago.
