Honestly, walking into a grocery store lately feels like a high-stakes gambling match. You look at a carton of eggs or a bag of coffee and think, "Wasn't this two dollars cheaper last month?" It’s a mess. People keep asking what is the inflation rate of the us right now, hoping for a simple answer that makes the checkout line hurt less. But the reality is a bit more layered than a single percentage point on a news ticker.
As of the latest data released by the Bureau of Labor Statistics (BLS) on January 13, 2026, the annual inflation rate in the US is sitting at 2.7%.
That number reflects the 12-month increase in the Consumer Price Index (CPI) through December 2025. On the surface, it sounds like we're winning. We’re down from those terrifying 9% peaks we saw a few years back. But if you’re still feeling broke, you aren't crazy.
The Number vs. The Vibe
There is a massive gap between the "official" number and what you're actually paying. Core inflation—which ignores the roller coaster of food and energy prices—actually dipped to 2.6% recently. That’s the lowest we’ve seen since early 2021. Economists love this because it suggests the "engine" of the economy isn't overheating.
But you can't eat a "core" index. You eat food. And food inflation just picked up steam, hitting 3.1% in the latest report.
✨ Don't miss: 350 Euros in US Dollars: Why the Simple Answer is Probably Wrong
If you feel like your paycheck is disappearing, it’s likely because of these specific pain points:
- Dining out: Full-service restaurant prices jumped 4.9% over the last year. Basically, the "convenience tax" is getting steeper.
- Utilities: Natural gas prices spiked 10.8%. That’s a massive hit to winter heating bills.
- Shelter: Rent and housing costs rose 3.2%. Since housing is most people’s biggest expense, this 3.2% feels way heavier than 2.7% on a bag of chips.
Why does "what is the inflation rate of the us" keep changing?
We had a weird end to 2025. Remember that 43-day government shutdown? It actually messed up the data collection. The BLS literally couldn't gather prices for October, which has left a "black hole" in our economic charts.
When the lights came back on, we found out that while gasoline prices had actually dropped by 3.4%—a rare bit of good news—other things like electricity (+6.7%) and car insurance were still climbing. It's like a game of Whac-A-Mole. You save $10 at the pump but lose $15 on your light bill.
The 2026 Outlook: Are we there yet?
The Federal Reserve has a "magic number" of 2%. They want inflation at 2% to feel like the economy is stable. We’re close at 2.7%, but we’re not quite "there" yet.
Most experts, including those at the IMF and Oxford Economics, think we’ll drift down to 2.4% by the end of 2026. But there are wildcards.
Tariffs are the big one. There’s a lot of talk about how new or increased tariffs might filter through to the price of goods. If companies have to pay more to bring products into the country, you can bet they’ll pass that cost onto you. Some analysts at RBC (Royal Bank of Canada) think this "tariff passthrough" won't even peak until the second quarter of 2026.
Then there’s the labor market. Wages are finally growing faster than prices—real average hourly earnings are up about 1% year-over-year. That’s good! It means your buying power is slowly returning. But if wages grow too fast, companies raise prices to cover the payroll, and the cycle starts all over again.
What you can actually do about it
Waiting for the Fed to fix everything is a slow game. Since the inflation rate of the us is likely to stay "sticky" above that 2% target for a while, you have to be tactical.
- Audit your "services" spend. Services inflation (like streaming, insurance, and gym memberships) is currently higher than goods inflation. It’s time to cancel that app you haven't opened since 2024.
- Lock in energy rates. With natural gas and electricity being so volatile, look into "budget billing" or fixed-rate plans from your utility providers if they’re available.
- Watch the used car market. Used vehicle prices finally started to moderate (up only 1.6% recently). If you've been holding off on a trade-in, the window might be opening, but don't expect 2019 prices ever again.
- Bulk buy the "stables." Nonalcoholic beverages jumped 5.1%. If you're a soda or sparkling water drinker, wait for the loss-leader sales at big-box stores and stock up.
The economy isn't in a freefall, but it isn't "cheap" either. We're in a period of "disinflation"—where prices are still rising, just more slowly. It’s a frustrating middle ground, but at least the 9% days are in the rearview mirror. Keep an eye on the next CPI release on February 11, 2026; that will tell us if the New Year brought any real relief or just more of the same.