Annual inflation cooled to 2.4% in January, an eight-month low

By Alicia Wallace, CNN

(CNN) — A Friday the 13th economic report appeared to deliver some fortunate news: Annual inflation slowed significantly.

However, the details of the latest Consumer Price Index presented a more sobering picture: Some price pressures aren’t just persisting, they’re accelerating.

Consumer prices rose 2.4% in January from the year before, marking an eight-month low and a sharp cooldown from the 2.7% rate notched in December, according to the Bureau of Labor Statistics’ CPI report released Friday.

On a monthly basis, prices rose 0.2%, slower than the December pace and helped by tumbling gas prices, the continuation of a years-long slowdown in housing-related costs and a more moderate increase in food prices.

Friday’s monthly reading came in better than projected as economists had forecast a 0.3% increase.

Economists had expected the annual rate to slow to 2.5%. But inflation came in even slower, at 2.4%, helped by more favorable prices at the pump grocery store. Math played a role as well – because prices spiked so much in January 2025, this January looked even better by comparison.

The core CPI gauge – a closely watched measurement that excludes volatile food and energy prices – also saw its annual rate of inflation ease.

Core CPI slowed to 2.5%, its lowest rate since March 2021, right before the pandemic-era inflationary spike.

But the underlying trajectory went in a different direction: The core CPI index accelerated to a five-month high of 0.3% from December’s 0.2%.

“While mild topline inflation is encouraging, it would be premature to declare victory on inflation,” Joe Brusuelas, RSM US chief economist, wrote in an email to CNN, “as one can clearly observe beneath the headline sharp turn of the year pricing and sustained increase in tariff-sensitive goods.”

This story is developing and will be updated.

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