Inflation slowed in January to its tamest pace since May 2025 after an upbeat jobs report as the economy seemingly skirts the full effects of President Trump’s tariffs for now.
The Consumer Price Index rose 2.4% in January, undershooting expectations and decelerating to its pace last May – just a month after Trump unveiled steep “Liberation Day” tariffs that economists warned would reheat prices, the Bureau of Labor Statistics said Friday.
The core figure – which excludes volatile food and energy prices – decelerated to 2.5%, its coolest level since 2021.
Consumer inflation has been steadily inching down from a 3% peak in September, hitting 2.7% in December – though wholesale inflation has stayed hot at 3%.
But Friday’s report was tame considering prices typically spike in January, and it followed a surprisingly strong payrolls report earlier this week that found US employers added 130,000 jobs in the same month.
“It won’t increase the likelihood of a rate cut within the next few months largely because of Wednesday’s blowout employment numbers, which threw ice cold water on any hopes of a near-term rate cut,” Skyler Weinand, chief investment officer at Regan Capital, said in a note Friday.
“The Fed is always in a tug of war between balancing inflation with employment, but they just can’t cut rates right now with the economy having just created a six-figure jobs number.”
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