US Inflation Hits Near Five-Year Low in January 2026 as Gas Prices Plunge and Housing Costs Finally Cool
US inflation cooled to a near five-year low in January 2026, as sharply lower gasoline prices and a noticeable slowdown in housing costs finally gave American consumers some breathing room after years of relentless price pressure. The Consumer Price Index rose just 2.4% year-over-year in January—down from 2.7% in December and the softest reading since mid-2021—coming in below Wall Street's consensus forecast of 2.5%. Stripping out the volatile food and energy categories, core CPI climbed 2.5% annually, its slowest pace since early 2021, while the month-to-month increase held at a tame 0.3%. What drove the drop? Energy and vehicles led the way. Gasoline prices plunged 7.5% from a year earlier, with a steep 3.2% monthly decline in January alone in many regions. Used-vehicle prices fell roughly 2%, and grocery inflation remained modest at +0.2% month-over-month. Shelter costs —the single biggest component of CPI—continued to decelerate, now growing around 3% annually, a far cry...