U.S. inflation worse in January with higher grocery, gasoline prices

NEW YORK, Feb. 12 (Xinhua) -- U.S. inflation accelerated last month as the cost of groceries, gasoline and rents rose, a disappointment for families and businesses struggling with higher costs and likely underscoring the Federal Reserve's resolve to delay further interest rate cuts.

The consumer price index increased 3 percent in January from a year ago, Wednesday's report from the Labor Department showed, up from 2.9 percent the previous month. It has increased from a 3.5-year low of 2.4 percent in September.

"The figures show that inflation has remained stubbornly above the Fed's 2 percent target for roughly the past six months, after it fell steadily for about a year and a half," noted The Associated Press.

Elevated prices created a major political hurdle for former President Joe Biden. President Donald Trump pledged to reduce prices in last year's campaign, though most economists worry that his proposed tariffs could at least temporarily increase costs, it said.

"The unexpected boost in inflation could dampen some of the business enthusiasm that arose after Trump's election on promises to reduce regulation and cut taxes. Dow futures tumbled 400 points and all major markets are likely to sell off at the opening bell. Bond yields rose, a sign traders expect inflation and interest rates to remain high," it added.