U.S. Inflation Rises to 3% in January 2025, Marking Fourth Consecutive Increase
Inflation in the United States continued to rise in January 2025, with the Consumer Price Index (CPI) increasing by 3% year-over-year, according to the U.S. Bureau of Labor Statistics. This marks the fourth consecutive month of rising inflation, up from 2.9% in December 2024. Economists expressed concerns that the period of broad disinflation may be over, as price increases were observed across various categories, including groceries, energy, prescription drugs, and transportation.
Grocery prices saw a significant jump, rising 0.5% from December to January, with egg prices surging by 15% month-over-month and 53% over the past year due to supply shortages caused by a deadly bird flu outbreak. Gasoline prices also increased by 2%, reflecting higher oil prices, while housing costs remained relatively stable, with shelter inflation at 4.4% annually, the smallest increase since January 2022.
The Federal Reserve’s target of 2% annual inflation remains unmet, and economists warn that President Donald Trump’s policy agenda, including potential tariffs and immigration measures, could exacerbate inflationary pressures. Tariffs on imports, particularly from Canada and Mexico, are expected to raise consumer prices, with economists predicting a mild inflationary impact in the second half of 2025. Auto prices have already been affected, as consumers anticipate higher tariffs and front-load purchases.
Despite Trump’s campaign promises to lower prices, the latest inflation data highlights the complexity of controlling inflation, with external factors like global supply chains and domestic labor markets playing significant roles. Economists caution that while one month of data does not establish a trend, the persistent inflation readings suggest that the Federal Reserve may delay interest rate cuts, further complicating the economic outlook.
Here's the inflation breakdown for January 2025 — in one chart
The consumer price index rose 3% on the year in January 2025. Economists worry that broad disinflation is over, even as tariffs loom.
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