US consumer inflation unexpectedly accelerated to 3.0% in January

FILE – An empty shelf of free range eggs is seen at a Safeway, Monday, Jan. 27, 2025, in Seattle. (AP Photo/Lindsey Wasson)

Washington, United States — US consumer inflation unexpectedly accelerated last month, according to government data published Wednesday, adding to pressure on the Federal Reserve to continue its rate cut pause.

The consumer price index (CPI) edged up to 3.0 percent in January from a year ago, rising slightly from 2.9 percent in December, the Labor Department said in a statement.

This was slightly above the median forecast of 2.8 percent predicted by economists surveyed by Dow Jones Newswires and The Wall Street Journal.

READ: US consumer inflation rises to 2.9% in December

The data will likely fuel calls for the Fed — the independent US central bank — to hold its key lending rate at between 4.25 and 4.50 percent as it waits for prices to ease.

Article continues after this advertisement

The Fed has a long-term inflation target of two percent, measured against a different inflation gauge, and aims to hit it primarily by raising and lowering short-term interest rates.

Article continues after this advertisement

These actions influence the cost of borrowing for consumers and businesses alike.

Another worrying data point for the Fed in the data published Wednesday was the slight uptick to annual inflation excluding volatile food and energy costs, which also accelerated slightly to 3.3 percent.

On a monthly basis, inflation increased by 0.5 percent in January, and by 0.3 percent excluding food and energy.