The report sent Treasuries and stocks tumbling, as it added to concerns about an inflation pickup that have roiled financial markets this month.
Over the same period, inflation, as measured by CPI was 2.7 per cent and was four per cent as measured by RPI.
"This time around we are working on the assumption that the transport services category, air fares particularly, will apply some upward pressure to the 12-month inflation rate, with the month-to-month drop in prices likely to be less than in January a year ago", she said.
The BLS noted that the rise in inflation was "broad-based, with increases in the indexes for gasoline, shelter, apparel, medical care, and food all contributing".
The market's muted reaction to today's stronger-than-expected CPI could be due to the fact that the spike wasn't massive, and also came on a day when January retail sales came in weaker than expected, said Mike Loewengart, VP of investment strategy at E-Trade. It's a sharp shift from previous year when consumer price growth slowed, even as the economy grew and the unemployment rate fell.
India Inc lauded the continuing high single-digit recovery in industry as well as the slight fall in inflation. That would signal the market expects more Fed rate increases.
Rising inflation could hurt consumer spending, which is already showing signs of slowing.
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"The fall in inflation will likely be more gradual now than we initially expected and could be delayed".
"Headline inflation was unchanged with petrol prices rising by less than this time past year".
The year-over-year increase in prices was moderated by sharp price increases in January 2017, when headline inflation rose 0.6%, the sharpest rise in four years. There's a bit of exuberance in the market after we got that big wage number. However, it was healthier than the 2.4% growth clocked in the year-ago period. The relative weakness in the Pound in the past few sessions has been somewhat surprising, given the BoE was unambiguously hawkish last week. A key factor is the extent of higher costs that firms have yet to pass through from the weakening of the Pound over the past year and a half. Stocks and bonds, however, could be vulnerable to strong inflation data.
"This adds further weight to the case for higher interest rates sooner rather than later". The market shed more than $1 trillion in market capitalization in the days of trading this month as investors, for the first time in almost a decade, believe that central banks around the world will pull back on their recession-era easy money policies and raise interest rates to ensure that rapidly growing economies don't run too hot.
The core CPI is viewed as a better measure of underlying inflation trends. Then it fell back to exactly where it had been before the announcement.
"However, at the same time, domestic price pressures stemming from rising wages and tightening capacity constraints are expected to build".
The central bank expects retail inflation to pick up to 5.1-5.6 percent in April-September before easing, assuming normal rainfall.