U.S. core inflation may fall to 5-year low in report out Friday

WASHINGTON (AP) — A measure of inflation may have fallen to a five-year low in January as rental costs have cooled, a sign that some prices are moderating while Americans continue to grapple with a big rise in overall prices in the past five years.

Inflation is forecast to have fallen to a 2.4% annual rate in January from 2.7% in December in the latest government report on consumer prices to be issued Friday. That would be the lowest rate in nine months. Core prices, which exclude the volatile food and gas categories, are expected to decline to 2.5% from 2.6%, the lowest in nearly five years, according to data provider FactSet.

On a monthly basis, inflation may show signs of remaining elevated: Overall and core prices are expected to rise 0.3% in January from December, a pace that if maintained for several months would start to push annual inflation higher.

Friday's report may point to cooling inflation, but it comes after the cost of food, gas, and apartment rents have soared since 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.”

If inflation gets closer to the Federal Reserve's target of 2%, it could allow the central bank to cut its key short-term interest rate further this year, as Trump has repeatedly demanded. High borrowing costs for things like mortgages and auto loans have also contributed to a perception that many big-ticket items remain out of reach for many Americans.

In January, economists expect that gas prices will have declined, while the cost of groceries could rise again after they jumped in December. Overall prices could increase by more than expected, economists say, because costs often rise more in January than other months as companies reset their prices at the beginning of the year.

Inflation surged to 9.1% in 2022 as consumer spending soared at the same time supply chains snarled in the wake of the pandemic. It began to fall in 2023 but leveled off around 3% in mid-2024 and has since barely improved.

Inflation cooled a bit this fall, though some of that reflected the disruptions of the six-week government shutdown in October. The shutdown disrupted the government's data collection and led them to estimate price changes in November for housing that most economists say artificially lowered inflation that month.

At the same time, measures of wage growth have declined in the past year or so as hiring has cratered. With companies reluctant to add jobs, workers don't have as much leverage to demand raises. Smaller pay increases can reduce inflationary pressures as companies often raise prices to offset higher wages.

More modest wage growth is a big reason that many economists expect inflation to continue easing this year.

“We're not expecting inflation to start up again by any stretch,” said Luke Tilley, chief economist for Wilmington Trust.

Many businesses are still eating some tariff costs and economists expect they may raise prices more in the next few months to offset those extra expenses. Still, most forecast that inflation will decline further by the second half of the year and drop closer to the Fed's 2% target by the end of 2026.

Shoppers shop at a grocery store in Schaumburg, Ill., Monday, Feb. 9, 2026. (AP Photo/Nam Y. Huh)

A person shops at a grocery store in Schaumburg, Ill., Monday, Feb. 9, 2026. (AP Photo/Nam Y. Huh)

Shoppers shop at a grocery store in Schaumburg, Ill., Monday, Feb. 9, 2026. (AP Photo/Nam Y. Huh)

Shoppers shop at a grocery store in Schaumburg, Ill., Monday, Feb. 9, 2026. (AP Photo/Nam Y. Huh)

A shopper looks at produce at a grocery store Tuesday, Feb. 10, 2026, in Chicago. (AP Photo/Erin Hooley)

DENVER (AP) — Brandon Marsh hit a three-run homer as part of a seven-run first inning, Aaron Nola pitched efficiently into the seventh and the Philadelphia Phillies spoiled Colorado’s home opener by beating the Rockies 10-1 on Friday.

The Phillies set the tone early by sending 11 batters to the plate against Michael Lorenzen (0-1) to begin the game. They finished with 13 hits, including three homers — all by lefties — with the wind blowing from left field. Marsh hit a sinker that went a projected 454 feet to the second deck in right-center. In the second, Bryce Harper launched a solo shot. Kyle Schwarber added a 460-foot drive to right field in the fifth.

Nola (1-0) scattered five hits and gave up one run over 6 1/3 innings. He struck out nine — the bullpen had six more — as Philadelphia won its eighth straight over Colorado. The latest one marked the Rockies' most lopsided loss in a home opener.

It also was win No. 350 for Phillies manager Rob Thomson, making him the fastest to reach the mark in club history (604 games).

There were 48,366 fans who showed up on a sunny but cool afternoon. The Rockies, a team coming off three straight 100-loss seasons, dropped to 18-16 in home openers, including 17-15 at Coors Field.

It was a rough outing for Lorenzen, who allowed nine runs and 12 hits over three innings. Mickey Moniak had one of Colorado's five hits in his first game of the season. Moniak started on the injured list due to a sprained right ring finger.

The Rockies were coming off a three-game series win in Toronto. They didn't capture their first series last season until early June against Miami.

The Phillies will throw lefty Jesús Luzardo (0-1, 9.00 ERA) on Saturday. The Rockies hadn't announced a scheduled starter, but right-hander Chase Dollander (1-0, 9.00) is expected to get some work.

AP MLB: https://apnews.com/mlb

Colorado Rockies starting pitcher Michael Lorenzen calls for a new ball after giving up a three-run home run to Philadelphia Phillies' Brandon Marsh in the first inning of a baseball game Friday, April 3, 2026, in Denver. (AP Photo/David Zalubowski)

From left to right, Philadelphia Phillies' Alec Bohm, Bryson Stott and Brandon Marsh celebrate as Marsh crosses home plate after hitting a three-run home run off Colorado Rockies starting pitcher Michael Lorenzen in the first inning of a baseball game Friday, April 3, 2026, in Denver. (AP Photo/David Zalubowski)

Philadelphia Phillies starting pitcher Aaron Nola works against the Colorado Rockies in the fifth inning of a baseball game Friday, April 3, 2026, in Denver. (AP Photo/David Zalubowski)

Philadelphia Phillies' Bryce Harper, right, congratulates Kyle Schwarber after his solo home run off Colorado Rockies relief pitcher Valente Bellozo in the fifth inning of a baseball game Friday, April 3, 2026, in Denver. (AP Photo/David Zalubowski)

Philadelphia Phillies' Brandon Marsh, right, follows the flight of his three-run home run off Colorado Rockies starting pitcher Michael Lorenzen in the first inning of a baseball game Friday, April 3, 2026, in Denver. (AP Photo/David Zalubowski)