Consumer prices tick up as core inflation declines

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

The consumer price index rose to 2.9% in December from a year ago, Wednesday's report from the Labor Department showed, up from 2.7% in November. It was the third straight increase after inflation fell to a 3½-year low of 2.4% in September.

Yet excluding the volatile food and energy categories, socalled core inflation dropped to 3.2% after remaining frozen at 3.3% for three months. Economists pay close attention to core prices because they typically provide a better guide of inflation's future course.