US inflation quickens to 3pc in January

Market: Metals, Natural gas
12/02/25

US consumer inflation accelerated in January to the fastest pace in half a year, supporting the Federal Reserve's recent decision to pause in its course of rate cuts.

The consumer price index (CPI) rose by 3pc in January from a year before, accelerating from 2.9pc in December, the Bureau of Labor Statistics reported today. That marked a fourth month of annual gains from a low of 2.4pc in September.

Core inflation, which strips out volatile food and energy, rose by an annual 3.3pc in January from 3.2pc in December.

The acceleration in inflation reinforces the Fed's decision last month to hold its target rate steady after three prior rate cuts. The Fed has said it does "not need to be in a hurry" to change its stance while it weighs the impacts of President Donald Trump's tariff policies and other "incoming information". Trump won the November election partly on a pledge to bring down inflation.

The energy index rose by 1pc in January following a 0.5pc contraction through December. Gasoline fell by 0.2pc in January after a 3.5pc contraction through December. Piped gas rose by 4.9pc for a second month.

Food rose by an annual 2.5pc, matching the prior month's annual gain. Eggs surged by an annual 53pc, as avian flu has slashed supply.

Shelter rose by 4.4pc, accounting for 30pc of the overall monthly gain in CPI, slowing from 4.6pc in December.

Services less energy services rose by 4.3pc in January following a 4.4pc gain

New vehicles fell by 0.3pc after a 0.4pc contraction.

Transportation services rose by an annual 8pc in January after a 7.3pc gain in December. Car insurance was up by an annual 11.8pc and airline fares were up by 7.1pc.

CPI accelerated to 0.5pc in January from the prior month, the most since August 2023. That followed a monthly gain of 0.4pc in December, 0.3pc in November and three prior months of 0.2pc gains.

By Bob Willis

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