Inflation: Consumer prices rise 3.1% in January, defying forecasts for a faster slowdown

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US consumer prices rose higher than expected in January, according to the latest data from the Bureau of Labor Statistics released Tuesday morning.

The Consumer Price Index (CPI) rose 0.3% over last month and 3.1% over the prior year in January, slightly higher than December’s 0.2% month-over-month increase but a deceleration from December’s 3.4% annual gain.

Both measures were slightly higher compared to economist forecasts of a 0.2% month-over-month increase and a 2.9% annual increase, according to data from Bloomberg.

On a “core” basis, which strips out the more volatile costs of food and gas, prices in January climbed 0.4% over the prior month and 3.9% over last year.

The monthly jump represented a slight acceleration from December’s 0.3% increase and was the hottest monthly core reading since April. January’s annual core increase matched December’s.

Both measures were also hotter than economists expectated.

Alexandra Canal is a Senior Reporter at Yahoo Finance. Follow her on Twitter @allie_canal, LinkedIn, and email her at alexandra.canal@yahoofinance.com.

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