Key US Inflation Measure Hits Near 5-Year Low

Drop driven by falling gas and housing prices

Published on Feb. 13, 2026

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A key measure of inflation in the United States fell last month to a level close to a nearly five-year low, as the growth in rental and housing prices slowed down.

Why it matters

This drop in the inflation rate could provide some relief to American consumers who have been dealing with high prices for goods and services over the past year. It may also influence the Federal Reserve's decisions on future interest rate hikes.

The details

The personal consumption expenditures (PCE) price index, which the Federal Reserve closely monitors, rose just 0.1% in January from the previous month. Over the past 12 months, the PCE index has increased 5.4%, down from 5.7% in December. This is the lowest 12-month inflation rate since February 2018.

  • The PCE price index rose 0.1% in January 2026 from the previous month.
  • The 12-month inflation rate as of January 2026 was 5.4%, down from 5.7% in December 2025.

The players

Federal Reserve

The central banking system of the United States that conducts monetary policy and regulates the nation's financial system.

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What’s next

The Federal Reserve will likely take this lower inflation data into account as it considers whether to raise interest rates further in the coming months to try to bring inflation fully under control.

The takeaway

This drop in a key inflation measure provides some welcome relief for American consumers, but the Federal Reserve will still need to monitor price trends closely and potentially take additional steps to bring inflation down to its 2% target.