The January 2025 Consumer Price Index of All Urban Consumers (CPI-U) report indicates that inflation increased by 0.2% this month, down from 0.3% in December. These data were released at 8:30 am EST on February 13, 2026, by the Bureau of Labor Statistics (BLS). Before seasonal adjustment, the year-over-year (Y-o-Y) inflation rate in the all-items index grew by 2.4%, a deceleration from the 2.7% realized in December.
The figures were well behaved and mostly aligned with economists’ consensus estimates. The table below is courtesy of Investing.com. The left column represents January’s figures, while the right column represents forecasters’ expectations. As you can see, the headline figures missed slightly, while the core metrics matched the consensus.
As it stands, a mixed economic outlook has Fed officials leaning in a hawkish direction. Dallas Fed President Lorie Logan said on Feb. 10 that “We will learn in the coming months whether inflation is coming down to our target and whether the labor market will remain stable. If so, this would tell me that our current policy stance is appropriate and no further rate cuts are needed to achieve our dual mandate goals.
“If instead we see inflation coming down but with further material cooling in the labor market, cutting rates again could become appropriate. But right now, I am more worried about inflation remaining stubbornly high.”
Thus, with commodity futures prices rising sharply in January, higher input costs could uplift the CPI over the next few months and keep the Fed on hold.
Food Prices
The food index rose by 0.2% MoM in January, and five of the six major grocery indices increased this month.
- Cereals and bakery products (+1.2%)
- Meats, poultry, fish, and eggs (+0.2%)
- Dairy and related products (+0.8%)
- Fruits and vegetables (+0.1%)
- Nonalcoholic beverages (+0.1%)
- Other food at home (-0.3%)
Surprisingly, the food away from home index only increased by 0.1% (versus 0.7% in December), as restaurant inflation underperformed in January.
Energy Prices
The energy index fell by 1.5% MoM in January, with gasoline prices down by 3.2%, electricity down by 0.1%, and natural gas rising by 1.0%.
Core CPI
The January core CPI rose by 2.5% Y-o-Y, down from 2.6% in December. Below is an itemized breakdown of the various components:
- Shelter index: (+0.2%) [December: +0.4%]
- Rent index: (+0.2%) [December: +0.3%]
- Owners’ equivalent rent: (+0.2%) [December: +0.3%]
- Motor vehicle insurance: (-0.4%) [December: NA]
- Medical care services: (+0.3%) [December: +0.4%]
- Physician services: (+0.3%) [December: +0.3%]
- Hospital services: (+0.9%) [December: +1.0%]
- Airline fares: (+6.5%) [December: +3.8%]
Seasonally Unadjusted CPI
Before seasonal adjustments, the CPI-U for January 2025 increased by 2.4% Y-o-Y to an index level of 325.252. Since these figures are unadjusted, they include regular seasonal price fluctuations that can create volatility in the results.
From Bad to Good
After months of solid economic data, weakness to start the New Year had recession whispers growing louder.
For example, the BLS reported on Feb. 5 that JOLTS Job Openings retreated in December. The report stated:
“The number of job openings trended down to 6.5 million (-386,000) in December and was down by 966,000 over the year. The job openings rate, at 3.9 percent, changed little over the month. The number of job openings decreased in professional and business services (-257,000), retail trade (-195,000), and finance and insurance (-120,000).”
Moreover, with the metric sinking below its pre-pandemic baseline, a cooling U.S. labor market was on full display.
Next up, the U.S. Census Bureau revealed on Feb. 10 that retail sales were flat in December, which poured cold water on the idea of robust holiday sales. As a result, consumer spending and employment weakness created more uncertainty for investors and policymakers.
However, while it seemed like the economic outlook could be headed in a negative direction, the BLS reported on Feb. 11 that U.S. nonfarm payrolls rose by 130,000 in January, the largest monthly increase since December 2024.
More importantly, the job gains, wage inflation, and the unemployment rate all outperformed economists’ consensus estimates, offsetting the recession fears that culminated from the weak data above.
Add it all up, and the recent data is still strong enough to keep the FOMC on hold. Higher inflation is likely over the next few months, and the committee is unlikely to expedite rate cuts as long as employment remains solid.
Turning to the financial markets, gold and silver stole the show in January, with rapid rises and intense corrections. And while both have calmed for the time being, volatility could be amplified as their bull markets reach an accelerated phase.
To explain, the blue line above tracks the gold-S&P 500 ratio. If you analyze the left side of the chart, you can see that gold significantly outperformed stocks leading up to, during, and after the global financial crisis.
Therefore, while the surge above $5,000 has garnered plenty of headlines, the level of the ratio on the right side of the chart signals that more upside could be on the horizon, and gold could remain an in-demand asset for the foreseeable future.
Are you thinking about diversifying into precious metals? Talk to your financial advisor about initiating a gold IRA account today, allowing you to invest in this red-hot asset on a tax-advantaged basis. Additionally, our complimentary CPI inflation calculator remains at your disposal, enabling you to assess inflation’s impact on your finances. Please seek the guidance of a financial advisor before making any investment decision.
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Alex Demolitor is a Canadian financial writer hailing from Halifax, NS. Alex has a Bachelors Degree from King's College and passed the CFA Exam Level III. He specializes in fundamental analysis of the stock, bond, commodity, and FX markets. He also covers US & Canadian economic indicators.
