The Labor Department released the inflation report for December, which showed prices were up 2.9% from a year ago, in line with economists expectations and up from 2.7% in November.

Annual inflation ticked up for a third straight month in December as food, energy costs rose, CPI report showed. But underlying price measure eased.

The Consumer Price Index rose 2.9 percent from a year earlier, but a measure of underlying inflation was more encouraging.

The consumer price index increased by 2.9 percent in December from a year earlier, the Labor Department reported Wednesday, in line with economists’ expectations and hotter than a 2.7 percent rise in November. It was also above a 2.6 percent annual increase in October.

U.S. inflation likely worsened last month on the back of higher prices for gas, eggs, and used cars, a trend that could make it less likely that the Federal Reserve will cut its key interest rate much this year.

The Labor Department's inflation report for the month of December showed that food and energy prices were the primary drivers of stubborn inflation experienced by consumers.

U.S. inflation picked up last month as prices rose for gas, eggs, and used cars, yet underlying price pressures also showed signs of easing a bit. Wednesday’s report from the Labor Department showed that the consumer price index rose 2.

Excluding the volatile food and energy categories, so-called core inflation declined to 3.2%, after remaining stuck at 3.3% for three months in a row.