U.S. Inflation Eases to 2.4% in January as Gas, Rent Cool

The latest government data show U.S. consumer inflation slowed to 2.4% year over year in January 2026, its lowest level in nearly five years, as gasoline prices fell and rent increases moderated, bringing price growth closer to the Federal Reserve’s 2% target after a period when overall consumer prices climbed about 25% over five years. Core inflation, which excludes food and energy, rose 2.5% annually—its smallest gain since March 2021—while headline prices advanced 0.2% month over month and core 0.3%, with used-car prices dropping 1.8% just in January and gas down 3.2% on the month and 7.5% from a year earlier. Grocery prices, which have been a major political flashpoint, rose 0.2% in January and are up 2.1% over 12 months, slower than in prior years but still adding to household strain. Economists say easing wage growth and weaker hiring are helping cool inflation, and financial markets immediately reacted with lower 10‑year Treasury yields and higher stock futures on expectations the Fed may have more room to cut interest rates later this year, despite President Trump’s ongoing public pressure for faster cuts. Analysts and social-media commentary are already highlighting the tension between improving headline inflation numbers and the reality that many Americans still feel squeezed by much higher prices for housing, food and big-ticket items than before the pandemic.