US inflation falls to 2.4% in January after Trump’s tariffs led to price fluctuations | US economy

US inflation moderated in January to 2.4%, an easing after Donald Trump’s tariffs triggered price fluctuations last year.

Prices rose 0.2% from December to January, according to data released by the US 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 strips out the volatile food and energy industries, went up 0.3% over the month.

Economists anticipated prices would ease slightly, pushing the annual inflation rate down to 2.5%. The news comes as polls show voters souring on Trump’s economic record.

Last year, prices fluctuated wildly from spring to fall, going down to 2.3% in April, the lowest in more than four years, then slowly climbing up to 3% by September. By November and December, inflation had fallen to 2.7%.

In a statement, the White House said the new inflation figure was proof that Trump’s “America first agenda continues taming inflation – with no evidence of tariff-induced spikes”.

“Today’s expectation-beating CPI report proves that President Trump has defeated Joe Biden’s inflation crisis,” it said. “With inflation now low and stable, America’s economy is set to turbocharge even further through long-overdue interest rate cuts from the Fed.”

Wall Street is closely watching this inflation report to estimate its potential impact on interest rates. The Federal Reserve held off on a rate cut last January, though it is unclear which direction the central bank is leaning before its next board meeting in March.

Last month, the Fed chair, Jerome Powell, noted that Trump’s tariffs were still passing through the economy, though he expects they will cause a one-time increase in prices before settling into a new normal.

“The expectation is that we will see the effects of tariffs flowing through goods prices, peaking, and then starting to come down,” Powell said. “That’s what we expect to see over the course of this year.”

The Fed is also watching the labor market, which showed signs of strength in January, though overall jobs growth in 2025 was revised down. In 2025, 181,000 jobs were added to the economy, compared with 2m in 2024, after revisions.

The White House has largely looked past last year’s jobs numbers, with Trump touting growth in gross domestic product and price stability seen last fall. “We’ll go down as the greatest first year in history that nobody’s ever had, just based on the numbers,” Trump said in January.

But recent polling suggests American voters disapprove of Trump’s handling of the economy. A February Economist/YouGov poll showed 37% of American voters approve of his job performance – the lowest percentage across his first and second terms so far. Though the dip largely comes from the president’s handling of immigration, among all issues mentioned in the poll Trump’s lowest approval was on inflation.

This poses trouble for Republicans heading into the midterms. Trump ran on heavy promises to tackle high prices, but the president’s focus on tariffs and immigration has left voters weary.

The White House appears to be aware of its growing problem on prices. In recent weeks, Trump rolled out measures addressing affordability, including proposals addressing housing prices, credit card debt and drug prices.