January's Consumer Price Index came in below expectations, dropping annual inflation to 2.4% — the lowest reading since May and a sharp decline from December's 2.7%. The Bureau of Labor Statistics reported a modest 0.2% seasonally adjusted monthly increase for all urban consumers, beating economists' forecasts of 2.5%. Core inflation, which strips out food and energy, fell to its lowest point in nearly five years.
Florida's Voice reported that the Trump administration wasted no time framing the numbers as vindication. White House Deputy Press Secretary Kush Desai delivered a statement that doubled as a victory lap:
"Today's expectation-beating CPI report proves that President Trump has defeated Joe Biden's inflation crisis: overall inflation fell, and real wages grew by $1,400 in President Trump's first year in office."
That $1,400 figure — the real earnings gain for private-sector workers over the past year — sits at the center of the administration's case. Real average hourly earnings climbed 1.2% across all private-sector workers and 1.5% for middle- and lower-wage employees. Under the Biden administration, workers lost nearly $3,000 in real earnings, according to White House figures. The reversal is not subtle.
The numbers aren't abstract. They map onto the parts of the economy that working Americans actually feel.
Energy prices dropped 1.5%. Gasoline fell 3.2%. Used vehicles — a category that became a symbol of Biden-era sticker shock — declined 1.8%. Beef, eggs, and coffee all saw reductions in January. Prescription drug prices remained steady last month and declined over the course of 2025.
The sector-level wage data tells its own story:
These are not Silicon Valley knowledge workers or government-sector employees padding their resumes with DEI certifications. These are the people who build things, extract things, and make things — the backbone of the physical economy. When their real wages rise, it means the policy environment is rewarding production, not just consumption.
For months, critics warned that Trump's trade posture would ignite a new inflation spiral. The January data offers a clean rebuttal: no broad spikes have materialized. Energy is cheaper. Goods are cheaper. The categories most exposed to supply-chain disruption moved in the right direction.
This is worth sitting with for a moment. The entire economic case against the administration's trade agenda rested on the assumption that tariffs would function as a consumer tax, driving prices higher across the board. January's CPI doesn't just fail to confirm that theory — it contradicts it. The economy absorbed the policy shift and kept cooling.
That doesn't mean tariffs carry zero cost in any category. But the doomsday framing — the breathless cable-news segments, the op-eds treating every tariff announcement as a prelude to Smoot-Hawley — looks increasingly disconnected from the data.
Desai pointed to two areas where the administration sees continued momentum. Housing inflation, which has been the stickiest component of CPI for years, continues to cool. And prescription drug prices actually fell over the year — a trend the White House credits to its Most Favored Nation drug pricing deals and the Great Healthcare Plan.
"Housing inflation notably continues to cool, while prescription drug prices actually fell in 2025, with even more price relief ahead for American patients thanks to President Trump's Most Favored Nation drug pricing deals and the Great Healthcare Plan."
Housing and healthcare are the two categories that erode middle-class purchasing power faster than anything else. If both trend lines hold, the downstream effects on household budgets could be substantial — and politically potent heading into the midterms.
The White House didn't stop at celebrating the present. Desai turned the data into a direct message aimed at the Federal Reserve:
"With inflation now low and stable, America's economy is set to turbocharge even further through long-overdue interest rate cuts from the Fed."
The phrase "long-overdue" is doing deliberate work. The administration's position is clear: the Fed held rates higher than the data justified, and every month of delay costs borrowers — homebuyers, small businesses, anyone carrying variable-rate debt — real money. With inflation now sitting comfortably below economists' expectations, the case for continued restraint thins considerably.
Whether the Fed acts on that signal is another matter. But the political ground has shifted. A central bank that holds rates steady while inflation undershoots forecasts isn't being prudent. It's being stubborn.
Strip the rhetoric away, and the administration's argument reduces to a simple contrast: $3,000 lost under Biden, $1,400 gained under Trump. One presidency bled purchasing power from working families. The other restored it in twelve months.
Critics will note these are White House figures, not independently audited calculations. Fair enough. But the BLS data is the BLS data. Inflation fell. Real wages rose. Energy got cheaper. Food got cheaper. The trend lines all point in the same direction, and they all point away from the previous administration's record.
Americans don't need a press secretary to tell them whether their paycheck stretches further at the grocery store. They already know. The CPI report just confirmed what the checkout line has been saying for months.
