US inflation increased by more than expected last month, as higher egg and energy prices helped to push up the cost of living for Americans
Inflation rose to 3% in January, its highest rate for six months, and above the 2.9% expected by economists.
The rise comes weeks after the US central bank decided to hold interest rates, saying there was significant uncertainty about where the economy might be headed.
It poses a challenge to US President Donald Trump, who made tackling inflation a centrepiece of his election campaign last year, but has put forward policies, such as higher tariffs on imports, that economists say risk pushing up prices.
Ryan Sweet, chief US economist at Oxford Economics, said the latest report could put pressure on Trump to reconsider those plans, which would raise taxes on goods entering the country.
“Tariffs can still be used as a bargaining tool to get some concessions from other countries, but the political optics of putting even a little upward pressure on consumer prices via tariffs wouldn’t be great for the Trump administration,” he wrote.
The uptick in prices last month was wide-ranging, affecting car insurance, airfare, medicine and other basics.
Grocery prices climbed 0.5% over the month, compared with 0.3% in December, as egg prices surged more than 15% amid shortages caused by outbreak of avian flu.
That marked the biggest monthly increase in nearly a decade, the Labor Department said.
Prices for clothing, by contrast, declined, while rents and other housing related costs increased 4.4% over the last year, marking the smallest 12-month increase since January 2022.
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