The latest data from the Bureau of Labor Statistics shows that inflation continued to moderate at the start of 2026, with the Consumer Price Index rising 2.4% over the past year — its lowest rate in nearly five years. While the cooling trend reflects slowing price growth in key areas such as fuel and rental costs, certain essential elements like services and healthcare continue to exert upward pressure. For retirees and retirement planners, understanding these inflation dynamics is important because household expenses and cost-of-living adjustments to fixed incomes, such as Social Security benefits, are tied to inflation trends. A sustained period of moderate inflation can ease pressure on fixed-income budgets, but persistent increases in particular sectors — notably medical care and housing — can still challenge retirement spending plans. This article breaks down the core drivers of recent inflation trends, compares headline and core inflation, and highlights what retirees should watch as the year unfolds.