Inflation slowed more than expected in January, according to data released by the Bureau of Labor Statistics released Friday. This first report of the year was highly anticipated after being delayed by the recent government shutdown.

The Consumer Price Index increased 0.2% on a seasonally adjusted basis in January. Over the last 12 months, consumer prices increased 2.4% before seasonal adjustment, down from 2.7% in December. This is slightly below the 0.3% monthly increase and the 2.5% annual increase economists were anticipating.

Core CPI, which excludes energy and food items, increased 0.3% over the past month. It rose 2.5% over the last 12 months — the lowest increase since 2021, easing some worries about the impact of the Trump administration’s tariffs.

Here’s what the latest CPI report means for your household.

Housing costs remain a key driver of inflation

Housing costs continue to weigh on homeowners and renters.

​​The index for shelter rose 0.2% in January and was the largest factor in the all-items monthly increase, climbing 3% over the past year. Despite the increase, this measure rose at half the pace it did in the previous month, signaling that things could be moving in a more positive direction.

Groceries are still putting a damper on Americans’ budgets

The overall index for food increased 0.2% in January, as did the index for food at home. There was a rise in 5 out of 6 grocery store indexes, including cereals and bakery products, meats, poultry, fish, and eggs. The biggest increase: cereals and bakery products, which saw a 1.2% increase last month.

Beef and veal prices, on the other hand, which were closely monitored in 2025 as a barometer of food affordability, saw a small decrease of 0.4%. Egg prices — another closely watched staple — fell by 7%.

Lower energy costs helped offset other expenses

Lower energy costs helped offset higher costs in other areas. This index decreased 1.5% in January, due mostly to lower fuel oil and gasoline prices, falling 5.7% and 3.2%, respectively. According to AAA, the national average gas price for regular gas sits at $2.94. That’s compared to $3.16 just one year ago.

Despite it being a post-holiday season, travelers are still facing sky-high airfare. The index for airline fares increased 6.5% over the month — so if you plan to travel soon, road-tripping may be the way to go.