US inflation falls to 2.4% in January after Trump’s tariffs led to price fluctuations | US economy
US inflation eased to 2.4% in January After Donald Trump’s tariffs triggered price surges last year.
Prices rose 0.2% from December to January, according to data released by the U.S. Bureau of Labor Statistics on Friday measuring the consumer price index (CPI), which measures the price of a basket of goods and services. Core CPI, which excludes the volatile food and energy sectors, rose 0.3% for the month.
Economists were predicting that prices would fall slightly and the annual inflation rate would drop to 2.5%. The news comes like this surveys It shows that voters view Trump’s economic record poorly.
Last year, prices fluctuated wildly from spring to autumn, falling to 2.3% in April, the lowest in more than four years, and then slowly rising to 3% by September. Inflation fell to 2.7% in November and December.
Wall Street is watching this inflation report closely to estimate its potential impact on interest rates. The Federal Reserve postponed a rate cut last January, but it’s unclear which direction the central bank will take before its next board meeting in March.
Last month, Fed chairman Jerome Powell said Trump’s tariffs were still making their way through the economy, but he expected them to cause a one-time increase in prices before settling into a new normal.
“The expectation is that we will see the effects of tariffs flow through commodity prices, peak, and then begin to decline,” Powell said. “That’s what we expect to see throughout this year.”
The Fed is also monitoring the labor market, which showed signs of strength in January despite a downward revision to overall employment growth in 2025. Following the revisions, 2 million jobs were added to the economy in 2024, while 181,000 jobs were added in 2025.
The White House has largely looked past last year’s jobs numbers, with Trump touting the growth in gross domestic product and price stability seen last fall. “Just by the numbers alone, we’re going to go down as the greatest first year anyone has ever had in history,” Trump said in January.
But recent polls show American voters disapprove of Trump’s handling of the economy. February Economist/YouGov questionnaire It showed that 37% of American voters approved of his job performance; this is the lowest rate ever in his first and second terms. Of all the issues mentioned in the survey, Trump’s lowest support was on inflation, although the decline was largely due to the president’s handling of immigration.
This poses a problem for Republicans heading into the midterm elections. Trump has made strong promises against high prices, but the president’s focus on tariffs and immigration has left voters weary.
The White House seems aware of its growing problem with prices. In recent weeks, Trump has implemented affordability measures, including proposals to address housing prices, credit card debt and drug prices.
