US Economic Growth Revised Downward as Consumer Prices Rise

Recent economic data indicates a slowdown in growth at the end of 2025, coupled with a modest increase in consumer prices at the beginning of 2026. This combination presents a complex picture for the US economy, prompting analysts to closely monitor inflation and its potential impact on future economic activity.

Economic Growth Revision

Initial estimates of economic growth for the fourth quarter of 2025 have been revised downward, signaling a less robust expansion than previously anticipated. Even as specific figures for the revision weren’t immediately available, the trend suggests a cooling of economic momentum.

Consumer Price Index (CPI) Trends

The Consumer Price Index (CPI) data reveals a mixed bag of inflationary pressures. From December 2024 to December 2025, the CPI for all items rose by 2.7 percent . Yet, more recent data shows a slight uptick in prices at the start of 2026.

January 2026 Inflation Data

In January 2026, headline CPI-U inflation was 0.17 percent . Food price inflation also saw a small increase, registering at 0.19 percent during the same period . Notably, energy prices experienced a decrease of 1.47 percent , partially offsetting the increases in other sectors. Core CPI-U inflation, which excludes food and energy, was 0.30 percent .

Food Price Increases

Food prices continued their upward trajectory, with an overall increase of 0.4 percent from December 2025 to January 2026 . This increase brings the total food price inflation to 2.9 percent compared to January 2025 . Grocery store prices (food-at-home) rose by 0.6 percent, while restaurant prices (food-away-from-home) increased by 0.1 percent .

Broader Inflationary Picture

The all-items Consumer Price Index (CPI) increased 0.4 percent from December 2025 to January 2026, and was up 2.4 percent from January 2025 . Looking back at 2025 as a whole, food prices increased by 3.1 percent, with grocery prices rising 2.4 percent and restaurant prices increasing 4.1 percent .

Key Takeaways

• Economic growth at the end of 2025 was revised downward.
• The CPI rose 2.7 percent from December 2024 to December 2025.
• January 2026 saw a 0.17 percent increase in headline CPI-U.
• Food prices increased by 0.4 percent from December 2025 to January 2026.
• Energy prices decreased by 1.47 percent in January 2026.

The interplay between slowing economic growth and rising consumer prices will be a key focus for policymakers and investors in the coming months. Continued monitoring of these trends will be crucial for assessing the overall health of the US economy.