Inflation perked up more than anticipated in January, providing further incentive for the Federal Reserve to hold the line on interest rates.

The consumer price index, a broad measure of costs in goods and services across the U.S. economy, accelerated a seasonally adjusted 0.5% for the month, putting the annual inflation rate at 3%, the Bureau of Labor Statistics reported Wednesday. They were higher than the respective Dow Jones estimates for 0.3% and 2.9%. The annual rate was 0.1 percentage point higher than December.

Inflation ticked higher in January as stubbornly high prices continued to strain Americans' household finances as the Federal Reserve weighs a continued pause to its interest rate cut plans.

The Labor Department on Wednesday said that the consumer price index — a broad measure of how much everyday goods like gasoline, groceries and rent cost — increased 0.5% in January while it rose 3% on an annual basis. The annual figure is the highest since June 2024.

Many commonly purchased goods and services got more expensive in January, driving inflation in the wrong direction and to its highest rate since June of last year.

Consumer prices rose 0.5% from December — the fastest pace since August 2023 — resulting in an annual inflation rate of 3% for the 12 months that ended in January, according to the latest Consumer Price Index data released Wednesday by the Bureau of Labor Statistics.

U.S. job growth softened in September for the second straight month, but hiring likely remained healthy enough for the Federal Reserve to approve another jumbo interest rate hike when it meets in November.

Employers added 263,000 jobs in September, the Labor Department said in its monthly payroll report released Friday, beating the 250,000 jobs forecast by Refinitiv economists. The unemployment rate, meanwhile, unexpectedly dropped to 3.5%, matching a five-decade low, from 3.7% the previous month. 

America’s employers slowed their hiring in September but still added 263,000 jobs, a solid figure that will likely keep the Federal Reserve on pace to keep raising interest rates aggressively to fight persistently high inflation.

Friday’s government report showed that hiring fell from 315,000 in August to the weakest monthly gain since April 2021. The unemployment rate dropped from 3.7% to 3.5%, matching a half-century low.

U.S. employers hired more workers than expected in September, while the unemployment rate dropped to 3.5%, pointing to a tight labor market which keeps the Federal Reserve on its aggressive monetary policy tightening campaign for a while.

Inflation cooled on an annual basis for the first time in months in April, but rose more than expected as supply chain constraints, the Russian war in Ukraine and strong consumer demand continued to keep consumer prices running near a 40-year-high. 

The Labor Department said Wednesday that the consumer price index, a broad measure of the price for everyday goods including gasoline, groceries and rents, rose 8.3% in April from a year ago, below the 8.5% year-over-year surge recorded in March. Prices jumped 0.3% in the one-month period from March.

U.S. consumer price growth slowed sharply in April as gasoline eased off record highs, suggesting inflation has probably peaked, though it is likely to stay hot for a while and keep the Federal Reserve's foot on the brakes to cool demand.