Economists expect a moderate rise in January inflation, but many on Wall Street are bracing for a hotter-than-forecast reading. Consumer prices have a history of spiking early in the year, as businesses often raise fees, reverse holiday discounts, or reset prices in January. While official data is seasonally adjusted to smooth these patterns, economists say lingering “residual seasonality” still pushes January inflation higher than other months. This year, tariffs could add to the pressure, particularly if retailers pass higher import costs on to consumers during post-holiday price adjustments. Recent data from Adobe shows broad-based price increases in online goods such as electronics and appliances, which are heavily import-dependent. However, economists caution that a one-off January bump may not signal sustained inflation, as many companies remain wary of raising prices amid cost-conscious consumers and growing competition.
