U.S. inflation falls to 2.4% as gas and housing costs cool

U.S. inflation eased to 2.4% year‑over‑year in January, with core inflation at 2.5% and monthly consumer prices up 0.2% from December.

U.S. consumer inflation slowed to 2.4 per cent year‑over‑year in January. Core inflation, which excludes food and energy, was 2.5 per cent. The report points to slower apartment rent growth and a drop in gas prices as contributors. Some categories, including clothing, air fares and music subscriptions, rose in January. Key figures: - Headline consumer prices rose 2.4% year over year in January, down from 2.7% in December. - Core consumer prices rose 2.5% year over year, with a 0.3% monthly increase in January. - Monthly overall consumer prices increased 0.2% from December; used car prices fell 1.8% in January. - Gasoline prices fell 3.2% in January and are down about 7.5% from a year earlier. - Rental and housing costs rose 0.2% in December, and rents were up 2.8% year over year; October’s government shutdown affected some housing data. - A Federal Reserve Bank of New York study cited in the report found companies and consumers are bearing nearly 90% of recent tariff costs. Summary: The cooler January reading reduced near-term market concern and was followed by lower Treasury yields. If inflation moves closer to the Federal Reserve’s two per cent target, that could affect the Fed’s policy choices later this year. Economists note that tariff-related costs and businesses possibly passing them on could keep inflation elevated for a time. Most forecasts cited expect inflation to ease further by the second half of the year and move closer to the Fed’s target by the end of 2026.