Inflation measure falls to nearly five-year low as gas prices fall and housing costs cool

A key measure of inflation fell to nearly a five-year low last month as apartment rental price growth slowed and gas prices fell, offering some relief to Americans grappling with the sharp cost increases over the past five years.

Inflation dropped to 2.4% in January compared with a year earlier, down from 2.7% in December and not too far from the Federal Reserve’s 2% target. Core prices, which exclude the volatile food and energy categories, rose just 2.5% in January from a year ago, down from 2.6% the previous month and the smallest increase since March 2021.

Friday’s report suggests inflation could be cooling, but it comes after the cost of food, gas, and apartment rents soared after the pandemic, with consumer prices about 25% higher than they were five years ago. The increase in such a broad range of costs has become a high-profile political issue under the rubric of “affordability.”

Read more from the Associated Press.