CPI Jan 2026: Inflation Slows, Housing Costs Remain Sticky (UNHIGHEST CORE AT 2.5%)

The Bureau of Labor Statistics reported January CPI at 2.4%, slightly below 2.5% expectations, signaling continued moderation in inflation following three Fed interest rate cuts over the past six months. However, core inflation remains at 2.5%, with shelter costs up 3.0% year-over-year—rents and mortgage payments outpacing other categories. Energy prices fell 7.5% YoY, including gasoline, but this is offset by persistently high housing costs, which account for about 35% of CPI and are the most policy-resistant component. Airfares rose 6.5%, and personal care goods climbed 5.4% MoM. While some price pressures ease, consumers continue facing tough budget choices as discretionary spending is less affected than housing.