Analysis: The US January CPI rose less than expected, and a stabilizing labor market may lead the Federal Reserve to hold rates steady.

According to TechFlow TechFlow, on February 13th, citing data from Jinshi Data, the U.S. Bureau of Labor Statistics released data on Friday showing that the January CPI rose 0.2% month-over-month, slightly lower than December's 0.3% increase and also lower than economists' expectations of 0.3%. Excluding volatile food and energy prices, the core CPI rose 0.3% month-over-month, slightly higher than December's 0.2% increase. Year-over-year, the CPI rose 2.4%, a slowdown from December's 2.7%, mainly due to the high base effect from last year; the core CPI rose 2.5% year-over-year, lower than December's 2.6%. The January report included, for the first time, an update to the seasonal adjustment factor reflecting price changes in 2025. Economists pointed out that the core CPI data in January often exceeds expectations because the Bureau of Labor Statistics model fails to fully account for one-off price increases at the beginning of the year. This month's increase may reflect both this year-over-year effect and the transmission effect of Trump's broad tariffs. Despite the slowing inflation, a stabilizing labor market may allow the Federal Reserve to maintain interest rates for some time. Economists predict that inflation may rebound in stages this year due to the transmission of import tariffs and the depreciation of the US dollar last year.