CPI shows inflation still sticky and slowing grudgingly

The cost of living rose 0.5% in January — the biggest increase in three months — in a possible sign that U.S. inflation might not slow as quickly as hoped.

Higher housing costs and gasoline prices accounted for most of the increase. Economists polled by The Wall Street Journal had forecast a 0.4% advance in the consumer price index last month.

Consumer prices also rose 0.1% in December instead of declining, revised government figures showed.

U.S. stocks shed premarket gains after the report. Bond yields rose.

The annual rate of inflation, meanwhile, slowed again to 6.4% from 6.5%. That was the lowest level in 15 months.

The so-called core rate of inflation, which omits food and energy, advanced 0.4% for the second month in a row. It was above the Wall Street forecast of 0.3% gain.

The increase in the core rate over the past 12 months tapered to 5.6% from 5.7%.