U.S. inflation accelerated last month as prices for gas, eggs, and used cars rose, yet underlying price pressures also showed signs of easing, bolstering hopes that the Federal Reserve could still cut its key interest rate this year.

Inflation probably picked up in late 2024, fueled by robust household spending amid a strong economy. A key gauge of inflation — the consumer price index — is expected to show Wednesday morning that prices rose by 2.9 percent in December from a year earlier, according to economists’ forecasts of data released by the Bureau of Labor Statistics.

U.S. producer prices rose less than expected in December as higher costs for goods were partially offset by stable services prices, suggesting inflation remained on a downward trend after progress had stalled in recent months.

US consumer inflation rose for a third straight month in December as energy prices rose, according to government data published Wednesday, adding pressure on the Federal Reserve to pause rate cuts.

The Consumer Price Index ticked up by 0.4% in December, but a measure that excludes food and energy prices slowed for the first time in four months, the Labor Department said on Wednesday. Why it matters: Inflation resumed a cooling trend after a months-long interruption,

US consumer inflation rose for a third straight month in December as energy prices jumped but a widely-watched measure eased slightly, raising hopes that underlying inflation may be moderating. One of the biggest drivers of inflation in December was the energy index,