A sharp rise in energy costs pushed U.S. consumer prices up at their fastest pace in nearly a year last month, but underlying price pressures remained muted, a government report showed on Friday.
The consumer price index, the most widely used gauge of U.S. inflation, climbed 0.5 percent in January after a 0.2 percent rise the month before, the Labor Department said.
The so-called core CPI, which strips out volatile food and energy prices, gained just 0.2 percent in January.
Wall Street economists had expected the overall CPI to rise 0.3 percent and the core index to tick up a mild 0.1 percent.
The mild increase in core inflation held the 12-month change at the nearly 38-year low of 1.1 percent hit in December.
The benign reading on core inflation was likely to bolster the willingness of the Federal Reserve to act patiently in deciding when to raise interest rates, currently at their lowest since 1958 at 1.0 percent.
Much of the increase in consumer prices in January was due to a big jump in energy costs, which were up 4.7 percent last month - the biggest increase since March.
Gasoline prices rose 8.1 percent, the largest jump since last February, while fuel oil spiked 7.2 percent and natural gas prices increased 3.8 percent.
The energy price increases were reflected in a sharp 1.7 percent increase in transportation costs, despite a drop in new car prices, and a 0.4 percent gain for housing.
Food prices were unchanged in January, while apparel costs slid for the third straight month.
Federal Reserve officials warned repeatedly last year of the risk of inflation moving undesirably low. But now that the economy has shown some muscle, Fed officials have said they see the chance of inflation moving lower as nearly equal to the chance it will turn higher.
Nonetheless, they have vowed to act patiently in raising overnight interest rates.
“With inflation very low and substantial slack in the economy, the Federal Reserve can be patient in removing its current policy accommodation,” Greenspan told Congress last week.