January CPI Report Shows Cooling Inflation

Key prices like groceries, gas, and rent are slowing, providing relief for consumers

Published on Feb. 13, 2026

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The January inflation reading offered encouraging signs, with the Consumer Price Index coming in below expectations and falling to its lowest level in nine months. Inflation averaged a 2.6% annualized rate from November through January, compared with nearly 2.9% from July through September. Cooling inflation could provide some financial relief for budget-strapped consumers.

Why it matters

Slowing inflation, especially in areas like food, gas, and housing, will ease the financial burden on many American households that have been struggling with high prices. This could boost consumer spending and confidence in the economy.

The details

The January CPI report showed that inflation fell to 2.4% on an annualized basis, below economists' forecasts of 2.5%. Prices for groceries, gasoline, and rent all cooled compared to previous months. However, core inflation, which strips out volatile food and energy costs, still rose 2.5% year-over-year, indicating that price pressures remain somewhat persistent.

  • The January CPI report was released on February 13, 2026.
  • Inflation averaged a 2.6% annualized rate from November 2025 through January 2026, down from nearly 2.9% from July through September 2025.

The players

Heather Long

Chief economist at Navy Federal Credit Union.

Stephen Kates

Financial analyst at Bankrate.

Lydia Boussour

Senior economist at EY-Parthenon.

Bernard Yaros

Lead economist at Oxford Economics.

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What they’re saying

“Inflation fell to the lowest level since May, and key items such as food, gas and rent are cooling off. This will provide much-needed relief for middle-class and moderate-income families.”

— Heather Long, Chief economist at Navy Federal Credit Union (CBS News)

“They're going up at a slower pace, and that's what we want, but they're still going up.”

— Stephen Kates, Financial analyst at Bankrate (CBS News)

What’s next

Many experts say the Federal Reserve will hold off on another rate cut at its March meeting, even though January's CPI report showed inflation inching closer to the central bank's goal of a 2% annual rate. The Fed will likely be monitoring the labor market for signs of stabilization before making any further policy decisions.

The takeaway

The January CPI report provides welcome news for consumers and the economy, as it shows that inflation is cooling, especially in key areas like groceries, gas, and housing. This could ease the financial burden on many American households and boost consumer confidence, though the Federal Reserve will still need to closely monitor the data before making any further policy changes.