New federal data released Friday showed inflation slowing and wages rising in January, trends the Trump administration says signal improving affordability. The Bureau of Labor Statistics reported that consumer prices rose 2.4% last month, marking the slowest inflation pace since last spring and falling below the 2.5% forecast. Markets rose following the news as investors responded to the expectation-beating cooling of price pressures.
Average hourly earnings rose 3.7% over the past year, reflecting real wage growth that continues to outpace inflation. Private-sector employers added 130,000 jobs in January, a figure that shattered expectations during a month typically marked by seasonal lulls. “We saw real wage growth in 2025,” Treasury Secretary Scott Bessent said. “It could be very strong in 2026, and I think the American people are going to start feeling it.”
The White House described the data as a clear reflection of the success of President Donald Trump’s economic policies. White House Spokesperson Taylor Rogers stated, “President Trump has defeated Joe Biden’s inflation crisis in record time.” Rogers added, “Inflation is low, wages are up, and the American economy is booming — all thanks to President Trump’s pro-growth agenda.”
The administration highlighted that real wages surged by $1,400 during the President’s first year back in office. White House Deputy Press Secretary Kush Desai noted that this growth represents nearly half of the real wage decline seen during the Biden era. “This is just the beginning: President Trump’s MFN drug pricing deals, tax cuts, trade deals, and deregulation are just starting to take effect,” Desai said.
Treasury Secretary Scott Bessent attributed the cooling inflation to the administration’s focus on supply-side growth and fiscal discipline. He argued that the previous administration crashed the economy by boosting demand through government spending while constraining supply with regulations. “Joe Biden crashed the economy,” Bessent said. “The policies were a disaster for the American people.”
Energy prices provided a significant tailwind for the report, falling 1.5% in January with gasoline prices dropping 7.5% over the year. Shelter and food costs showed signs of moderation as the administration’s affordability agenda continues to target high housing costs. The January data marks a major milestone as the administration works to “Make America Affordable Again” through aggressive deregulation and tax reform.