Consumer prices rose just 0.2 percent in January — undercutting the 0.3 percent economists had forecast and delivering the clearest signal yet that the post-Biden inflation hangover is finally easing. Year-over-year, prices climbed 2.4 percent, again below the 2.5 percent Wall Street expected.
Core prices — stripping out food and energy — rose 0.3 percent for the month and 2.5 percent over the past 12 months, both in line with expectations. That annual core reading is the lowest since March 2021, before the inflation surge that defined the Biden era took hold.
When Trump took office, the annual rate of inflation stood at three percent. It's now moving in the right direction.
The headline number matters, but the category-level data tells a sharper story. According to Breitbart, Americans saw real relief in January across several of the expenses that hit hardest:
Gas down nearly eight percent year-over-year. Prescription drugs are falling. Used cars are cheaper for two months running. These aren't abstract data points — they're the line items on every family's monthly budget.
The decline in prescription drug prices is particularly notable, fulfilling a key promise of the Trump administration. The 0.7 percent annual drop in prescription costs may sound modest in isolation, but after years of relentless pharmaceutical price increases, any sustained downward pressure registers with the millions of Americans who fill prescriptions every month.
Grocery prices rose 0.2 percent, a slowdown from the prior month. Within that number, some welcome movement: beef prices declined 0.4 percent, and egg prices fell seven percent in a single month — down 34.2 percent from a year ago.
Restaurant prices were flat. The broader food-away-from-home index rose just 0.1 percent.
Beef still carries a punishing 15 percent year-over-year increase, a reminder that the Biden-era price surge didn't vanish overnight. But the monthly trajectory is bending. Families stretching a grocery budget noticed the difference between prices accelerating and prices stabilizing. January offered the latter.
Core goods prices — everything except food and energy — were flat for the month, same as December, and up just 1.1 percent from a year ago. That's essentially stable. New vehicles ticked up 0.1 percent after being flat in December, with a year-over-year increase of just 0.4 percent.
Washers and dryers rose 2.6 percent, partially reversing December's 4.1 percent decline. Month-to-month noise in durable goods categories is normal; the year-over-year figure — down 0.3 percent — tells the real story.
The services side runs hotter. The core services index climbed 0.4 percent for the month and sits at 2.9 percent year-over-year. Shelter — the single largest component of CPI — rose 0.2 percent. Services inflation remains the stickiest piece of the puzzle, driven by labor costs and structural supply constraints that monetary policy alone can't solve overnight.
But even here, the direction matters more than the level. A 0.2 percent monthly shelter increase is manageable. The question is whether it holds.
The CPI report didn't land in isolation. Employment data released this week showed the economy added 130,000 workers in January — more than twice what economists had forecast. The unemployment rate fell to 4.3 percent. Wages climbed 3.7 percent for the year.
That combination — inflation cooling while jobs and wages grow — is exactly the scenario that seemed elusive for years under the previous administration. Wages rising at 3.7 percent against inflation at 2.4 percent means real wage gains. Workers aren't just earning more. They're keeping more of it.
None of this erases what happened. The Biden administration oversaw the worst consumer price surge in four decades. Families watched their purchasing power erode month after month while Washington insisted inflation was "transitory." The cumulative damage — prices that rose and never came back down — still sits on every receipt and every rent check.
But trajectory matters. Inflation is at 2.4 percent and falling. Core inflation is at its lowest since before the Biden-era surge began. Gas prices are dropping. Prescription costs are declining. An economy adding jobs at double the expected rate while wages outpace prices.
The mess was inherited. The cleanup is underway. January's numbers show it's working.