Americans will get some relief from rising prices. Inflation slowed more than expected in January.

"Americans' wallets are ringing in the new year with a little relief from rising prices. The US started 2026 with a slower inflation rate than at the end of 2025. The consumer price index, an inflation measure, increased 2.4% in January from a year ago, below the 2.7% increase in both November and December. Economists expected a year-over-year increase of just 2.5%."

"We also got new data on the job market's performance this week. The Bureau of Labor Statistics released its rescheduled jobs report on Wednesday, due to the partial government shutdown, which showed the US added fewer jobs in 2025 than previously reported but better job growth this past January than expected. Unemployment fell in January from December as labor force participation ticked up."

"Federal Open Market Committee members held interest rates steady in their first decision of the year in January. They can use the new reports to determine what to do next with interest rates. CME FedWatch showed a 90% chance before the new consumer price index report that the Fed would hold rates steady, but more data will be available to understand the economy before they meet in March."

Consumer prices increased 2.4% year over year in January, down from 2.7% in November and December and slightly under the 2.5% forecast. Core CPI rose 2.5% year over year, just below the prior 2.6% reading. Energy prices fell 0.1% annually, led by a 7.5% drop in gasoline while natural gas rose 9.8%. The Bureau of Labor Statistics' rescheduled jobs report showed fewer jobs added in 2025 than previously reported but stronger-than-expected job growth in January, with unemployment falling and labor force participation rising. The Federal Open Market Committee left interest rates unchanged, with markets expecting more data ahead of the March meeting.

Read at Business Insider