U.S. Inflation Remains Elevated, but Pace Eases Amid Weaker Natural Gas Prices

U.S. inflation held at lofty levels but the pace of consumer cost increases edged lower in January, in part due to soft natural gas prices, extending a seven-month trend of easing expense pressure.

The Labor Department’s Consumer Price Index increased 6.4% in January from a year earlier – more than three times the 2% level the Federal Reserve says is healthy – but it was down from 6.5% in December.

The key measure of inflation peaked in the pandemic era at 9.1% last June, the highest level since 1981. The Fed since last spring has aggressively boosted interest rates to tamp down borrowing and spending, and this has helped ease inflationary pressures.

Soaring natural gas prices last spring and summer – following Russia’s invasion of Ukraine and amid heat waves that...