US inflation remains contained amid Fed patience on rates
WASHINGTON — A key measure of U.S. inflation was little changed in January while the broader gauge slowed on lower energy costs, underscoring the Federal Reserve's recent decision to be patient on raising interest rates.
Excluding food and energy, the so-called core consumer price index rose 0.2 percent from the prior month and 2.2 percent from a year earlier, according to a Labor Department report Wednesday. The monthly pace matched the median estimate of economists. The broader CPI was unchanged from December, below forecasts, while the annual gain of 1.6 percent was the smallest since June 2017.
The data suggest inflation remains around the Fed's 2 percent target, with prices getting a lift from steady wage gains. Fed officials have signaled a pause on raising rates amid global growth risks and headwinds from trade.
Even so, Treasury yields and the dollar rose after the report amid some hints that core inflation could be picking up. The latest data brought the three-month annualized increase to 2.65 percent, the fastest since March. If such acceleration is sustained, the Fed could have more reason to reconsider its rate pause.
A separate Labor Department report on Wednesday illustrated how prices are affecting consumers: average hourly wages, adjusted for inflation, increased 1.7 percent in