CPI Report Live: Today's Inflation Data Was a 'Welcome Surprise'
Here’s What Economists Are Saying About the Report
February 13, 2026 09:26 AM EST
Sal Guatieri, senior economist at BMO Capital Markets Economic Research
“Although measured CPI inflation is somewhat understated because of October’s shutdown-related distortions, it seems to be moving in the right direction—toward the 2% target—as both tariff effects and labour market pressures subside. Still, the FOMC will likely seek further confirmation that inflation is making sustained progress before resuming rate cuts, likely this summer.”
Bernard Yaros, lead economist at Oxford Economics
“Headline CPI inflation was a touch softer than expected in January, delivering a welcome surprise to the downside at the beginning of the year. In recent years, residual seasonality, along with delayed price adjustments in response to pandemic-era shocks, have led to upside CPI surprises in January. “
Matt Colyar, economist at Moody’s Analytics
“The 12-month rates will be distorted by the federal government shutdown for most of 2026. Gaps from October meant the Bureau of Labor Statistics had to assume no change in prices for the majority of components in the CPI. Though transparent and defensible, it is not a realistic assumption. Primarily, October’s carry-forward has introduced a downward bias through the CPI for shelter.”
Analysts at J.P. Morgan North America Equity Research
“We continue to expect tariff inflation to fade throughout 2026, resulting in a more favorable goods consumption environment.”
Jake Krimmel, senior economist at Realtor.com
“For housing and consumers, easing inflation is good news, but it comes with important caveats too. …The foundation for a housing rebound may be taking shape, but rebuilding confidence and moving the needle on affordability will require a sustained stretch of lower inflation and a more certain labor market.”
Economists at Wells Fargo
“On balance, we found today’s report to be encouraging. … Victory over inflation is not yet upon us. That said, there are reasons to be optimistic about the outlook. … Tariff-induced price hikes probably have not fully worked their way through the data, but we are closer to the end than the beginning of this source of higher prices.”
Here Are the Food Items That Saw the Most Inflation in January
February 13, 2026 09:14 AM EST
When drilling down into the specifics of where inflation was the highest, there are more details of where it grew the most. Here are the food items that had the highest inflation month-over-month:
- Canned vegetables: 5.5%
- Other condiments: 5.3%
- Bacon and related products: 4.3%
- Canned fruits: 4.2%
- Fresh fish and seafood: 3.6%
Here are the foods in which inflation fell the most:
- Eggs: -7%
- Pork chops: -4.1%
- Lettuce: -2.8%
- Other beverage materials including tea: -2.8%
- Oranges, including tangerines: -2.6%
Futures Trade Slightly Higher After Inflation Report
February 13, 2026 08:54 AM EST
Stock futures reversed course to trade slightly higher before the opening bell Friday after a crucial inflation report showed prices rose less than expected last month.
The blue-chip Dow Jones Industrial Average and benchmark S&P 500 were each up about 0.1% in early trading on Friday, while Nasdaq 100 futures contracts were flat but off lows from earlier in the morning.
Treasury yields fell following the release of Friday’s inflation report. The yield on the 10-year Treasury, which impacts interest rates on a variety of consumer loans, including mortgages, was recently 4.09%, down from 4.11% at Thursday’s close.
Follow along with our live market coverage here.
What Does Today’s Inflation Report Mean For the Federal Reserve?
February 13, 2026 08:48 AM EST
Softer inflation will likely give the Federal Reserve breathing room to wait and see how the economy evolves in the coming months.
According to the CME Group’s FedWatch Tool, traders are pricing in a 70% chance that central bankers will next cut their influential fed funds rate at their June meeting. That was up from 66% just before the report was released. The FedWatch tool forecasts rate movements based on fed funds futures trading data.
“January’s inflation data, paired with a strong job payroll report, support the FOMC members who think the easing cycle should remain on hold in the coming months,” wrote Moody’s Analytics Economist Matt Colyar.
Here Are the Categories Where Inflation Dropped the Most In January
February 13, 2026 08:43 AM EST
Inflation dropped the most month-over-month in the following categories:
- Fuel oil: -5.7%
- Gasoline (all types): -3.2%
- Used cars and trucks: -1.8%
Alternatively, here’s where inflation accelerated the most month-over-month:
- Transportation services: 1.4%
- Utility (piped) gas service: 1.0%
- Apparel: 0.3%
- Medical care services: 0.3%
Inflation Was Tame in January
February 13, 2026 08:32 AM EST
The Consumer Price Index rose 2.4% over the year in January, down from a 2.7% annual increase in December. That was less than economists expected and the lowest since May.
Core inflation fell to a 2.5% annual increase from 2.6% in December, the lowest since March 2021. Economists expect core inflation to be a better measure of inflation because it excludes volatile food and energy prices, which can fluctuate for factors not reflective of the broader economy.
“Headline CPI inflation was a touch softer than expected in January, delivering a welcome surprise to the downside at the beginning of the year,” wrote Bernard Yaros, lead economist at Oxford Economics. “In recent years, residual seasonality, along with delayed price adjustments in response to pandemic-era shocks, have led to upside CPI surprises in January.”
Federal Reserve Officials Are Still Nervous About Inflation
February 13, 2026 08:09 AM EST
Some Fed officials this week said their focus remains on elevated prices.
- Kansas City Fed President Jeffrey Schmid: “We must remain focused on our headline inflation objective; otherwise, I believe there is a real risk that inflation will get stuck closer to 3% than 2% in the long run.”
- Dallas Fed President Lorie Logan: “Looking ahead, I anticipate we’ll see progress on inflation this year. But I am not yet fully confident inflation is heading all the way back to 2%.”
- Cleveland Fed President Beth Hammack: “One notable development over the last year has been the rise in goods inflation, especially for items that are more exposed to global trade. While some firms have already passed these costs along, others say that more price increases are coming.”
But not everyone agrees inflation should be a main concern. Fed Governor Stephen Miran has been the lone dissenting vote in favor of aggressive cuts since joining the policy committee.
- Miran: “I view there being a variety of reasons to why I want to see lower interest rates. I think the truth is that pushing out the supply side of the economy still allows for monetary policy to accommodate that.”
Why Does Inflation Matter So Much to the Fed?
February 13, 2026 07:45 AM EST
The Fed’s dual mandate from Congress to keep inflation low and employment high has pulled central bankers in opposite directions in recent months.
Policymakers have been debating whether to resume cutting interest rates to bolster the job market like they did late last year, or keep them higher for longer to wrestle inflation down to the Fed’s 2% target.
Earlier this week, the latest labor market report surprised economists by being stronger than expected. A softer inflation reading could give the Fed room to breathe as they try to decide their next move.
Where Inflation is Coming From Matters
February 13, 2026 07:39 AM EST
Economists say that the inflation categories will be especially important in January’s reading.
Federal Reserve officials have been on the lookout for price increases related to tariffs. Central bankers have said that tariffs would be a one-time price increase that wouldn’t stoke inflation.
So, if sectors that aren’t subject to tariffs are seeing rising prices, that could be a larger concern for the Fed.
“If core comes in hotter than expected, or even above headline, that would raise questions. Within core, the Fed has signaled it is willing to look through tariff-related goods inflation as one-time price level shifts. Stickier services inflation would be harder to ignore,” wrote Realtor.com Senior Economist Jake Krimmel on Thursday.
What Happened in December’s Inflation Report?
February 13, 2026 07:28 AM EST
The Consumer Price Index rose 2.7% in December, the same annual increase as in November. That measurement matched forecaster expectations.
The core reading, which excludes volatile food and gas prices, rose 2.6% over the year, below the median forecast of 2.8%.
The report’s details were mixed for household budgets, despite overall cooling inflation. A 1.1% monthly drop in used-car prices and flat new-car prices helped keep the overall inflation rate from rising. Filling up those cars costs less, too, as gas prices fell 0.5%.
Food prices, on the other hand, rose 0.7% over the month, the highest increase since September 2022. Shelter prices rose 0.4%, the same as in August and reversing a deceleration in September.
What Do Economists Expect From Today’s Report?
February 13, 2026 07:19 AM EST
Price increases were likely relatively tame in January, with one key inflation measure expected to drop to its lowest level in nearly five years.
The report Friday from the Bureau of Labor Statistics is expected to show the Consumer Price Index rose 2.5% over the year in January, down from a 2.7% annual increase in December, according to a survey of economists by Dow Jones Newswires and The Wall Street Journal. That would be the lowest since May.
Core inflation is forecast to fall to a 2.5% annual increase from 2.6% in December, hitting a fresh low since 2021. Economists consider core inflation a better barometer of price trends, since it excludes volatile food and energy prices.
What is the Consumer Price Index Report?
February 13, 2026 07:11 AM EST
Each month, the Bureau of Labor Statistics releases its Consumer Price Index report.
CPI measures the monthly change in the prices of a representative basket of goods and services. CPI is a weighted average of prices and is used as a metric for inflation and deflation.
The BLS collects prices monthly from about 80,000 retail stores, service establishments, rental units, and doctors’ offices. That data is then used to track price changes nationwide.
Read more about the CPI report here.