{"id":58457,"date":"2026-02-13T09:38:32","date_gmt":"2026-02-13T13:38:32","guid":{"rendered":"https:\/\/stockmarketwatch.com\/stock-market-news\/us-inflation-cools-in-january-boosting-real-earnings-and-fed-rate-cut-hopes\/58457\/"},"modified":"2026-02-13T09:38:32","modified_gmt":"2026-02-13T13:38:32","slug":"us-inflation-cools-in-january-boosting-real-earnings-and-fed-rate-cut-hopes","status":"publish","type":"post","link":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/us-inflation-cools-in-january-boosting-real-earnings-and-fed-rate-cut-hopes\/58457\/","title":{"rendered":"US Inflation Cools in January, Boosting Real Earnings and Fed Rate Cut Hopes"},"content":{"rendered":"<h2>Key Takeaways<\/h2>\n<ul>\n<li><strong>US Inflation Eases:<\/strong> The Consumer Price Index (CPI) rose <strong>0.2%<\/strong> month-over-month in January, below estimates of <strong>0.3%<\/strong>. Year-over-year, CPI cooled to <strong>2.4%<\/strong> from <strong>2.7%<\/strong> in December.<\/li>\n<li><strong>Real Earnings Jump:<\/strong> Real average weekly earnings surged <strong>1.9%<\/strong> year-over-year, a significant increase from the <strong>1.1%<\/strong> rise in the previous month, as wage growth outpaced inflation.<\/li>\n<li><strong>European Security in Focus:<\/strong> German Chancellor <strong>Friedrich Merz<\/strong> called for a stronger, more self-supporting European pillar within <strong>NATO<\/strong> and initiated confidential talks with France on European nuclear deterrence.<\/li>\n<li><strong>Alibaba Faces Pentagon Scrutiny:<\/strong> The U.S. is expected to add Alibaba (<a href=\"\/stock\/BABA\">BABA<\/a>) to a Pentagon list of companies allegedly aiding the Chinese military.<\/li>\n<\/ul>\n<h2>US Inflation and Economic Data<\/h2>\n<p>Inflationary pressures in the United States showed signs of moderation in January, with the <strong>Consumer Price Index (CPI)<\/strong> rising less than expected. The headline CPI increased by <strong>0.2%<\/strong> on a monthly basis, against an estimated <strong>0.3%<\/strong>, bringing the annual rate down to <strong>2.4%<\/strong> from <strong>2.7%<\/strong> in December. This marks the lowest annual inflation rate since May 2025.<\/p>\n<p>The <strong>Core CPI<\/strong>, which excludes volatile food and energy prices, was in line with expectations, rising <strong>0.3%<\/strong> month-over-month. The annual Core CPI rate eased slightly to <strong>2.5%<\/strong> from <strong>2.6%<\/strong>.<\/p>\n<p>In a positive development for consumers, <strong>real average weekly earnings<\/strong> saw a significant year-over-year increase of <strong>1.9%<\/strong>, up from <strong>1.1%<\/strong> previously. Real average hourly earnings also ticked up to <strong>1.2%<\/strong> from <strong>1.1%<\/strong>. This suggests that wage growth is now outpacing the rate of inflation, increasing the purchasing power of American workers.<\/p>\n<h2>European Geopolitics and Defense<\/h2>\n<p>German Chancellor <strong>Friedrich Merz<\/strong> delivered a significant foreign policy speech, emphasizing the need for a stronger and more self-reliant Europe in the face of global challenges. Merz stated, &quot;We are not writing off NATO, we are building a strong, self-supporting European pillar.&quot; He also revealed that he has begun confidential discussions with French President Emmanuel Macron regarding European nuclear deterrence.<\/p>\n<p>Merz acknowledged a &quot;gap&quot; that has opened between Europe and the U.S. and called for a new transatlantic partnership to rebuild trust. He stressed that while Germany is strengthening its own defense capabilities and intelligence services, a united front is essential, noting, &quot;even the United States is not powerful enough to go it alone.&quot;<\/p>\n<p>These comments come as the <strong>UK<\/strong> announced plans to spend over <strong>\u00a3400 million<\/strong> on long-range weapons this fiscal year, and Italian Prime Minister <strong>Giorgia Meloni<\/strong> is reportedly planning <strong>\u20ac3 billion<\/strong> in energy aid to help consumers with bills.<\/p>\n<h2>Corporate and Market Movers<\/h2>\n<p>In company-specific news, <strong>Alibaba<\/strong> (<a href=\"\/stock\/BABA\">BABA<\/a>) is reportedly set to be added to a Pentagon list of firms with alleged ties to the Chinese military. This development could have significant implications for the e-commerce giant.<\/p>\n<p>In <a href=\"https:\/\/stockmarketwatch.com\/movers\/premarket\" data-internallinksmanager029f6b8e52c=\"7\" title=\"Premarket Movers\">pre-market trading<\/a>, U.S. stock futures were pointing to a lower open, with the <strong><a href=\"https:\/\/stockmarketwatch.com\/indices\/sp500\/today\" data-internallinksmanager029f6b8e52c=\"3\" title=\"snp500 today\">S&amp;P 500<\/a><\/strong> futures down <strong>0.3%<\/strong> and <strong>Nasdaq 100<\/strong> futures off by <strong>0.4%<\/strong>. Several major tech stocks were in the red, including <strong>Apple<\/strong> (<a href=\"\/stock\/AAPL\">AAPL<\/a>), <strong>Microsoft<\/strong> (<a href=\"\/stock\/MSFT\">MSFT<\/a>), <strong>Alphabet<\/strong> (<a href=\"\/stock\/GOOGL\">GOOGL<\/a>), <strong>Meta Platforms<\/strong> (<a href=\"\/stock\/META\">META<\/a>), <strong>Amazon<\/strong> (<a href=\"\/stock\/AMZN\">AMZN<\/a>), and <strong>Tesla<\/strong> (<a href=\"\/stock\/TSLA\">TSLA<\/a>).<\/p>\n<p>On the positive side, <strong>Rivian<\/strong> (<a href=\"\/stock\/RIVN\">RIVN<\/a>) shares soared <strong>20%<\/strong> in pre-market trading after reporting strong fourth-quarter results and guiding for a significant increase in vehicle deliveries for the current year. <strong>Roku<\/strong> (<a href=\"\/stock\/ROKU\">ROKU<\/a>) also saw its stock jump <strong>15%<\/strong> after its earnings per share and revenue surpassed Wall Street expectations.<\/p>\n<h2>Central Bank Commentary<\/h2>\n<p><strong>Bank of England<\/strong> Chief Economist <strong>Huw Pill<\/strong> commented on the UK&#39;s economic situation, stating that he does not see the labor market as being on the cusp of a non-linear downturn. He also suggested that holding interest rates at their current level should be sufficient to bring inflation under control, while noting that rates are currently &quot;a little bit too low.&quot; He believes underlying inflation in the UK is settling around <strong>2.5%<\/strong>, which is still above the central bank&#39;s <strong>2%<\/strong> target.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Key Takeaways US Inflation Eases: The Consumer Price Index (CPI) rose 0.2% month-over-month in January, below estimates of 0.3%. Year-over-year, [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":50383,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"rank_math_schema_Article":[],"rank_math_focus_keyword":[],"rank_math_description":[],"financial_data_references":[],"stock_symbols_mentioned":[],"footnotes":""},"categories":[5012],"tags":[3710,3712,3743,4223,5041,5310,7010,9296],"class_list":["post-58457","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-breaking-news","tag-federal-reserve","tag-cpi","tag-baba","tag-inflation","tag-nato","tag-us-economy","tag-european-defense","tag-transatlantic-relations"],"_links":{"self":[{"href":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/wp-json\/wp\/v2\/posts\/58457","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/wp-json\/wp\/v2\/comments?post=58457"}],"version-history":[{"count":0,"href":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/wp-json\/wp\/v2\/posts\/58457\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/wp-json\/wp\/v2\/media\/50383"}],"wp:attachment":[{"href":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/wp-json\/wp\/v2\/media?parent=58457"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/wp-json\/wp\/v2\/categories?post=58457"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/wp-json\/wp\/v2\/tags?post=58457"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}