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Consumer prices increased 0.5% over the month and 3.0% over the year in January, accelerating from the 2.9% over-the-year rise in December and coming in higher than expectations. Core CPI, which excludes more volatile energy and food prices, edged up to a 3.3% over-the-year increase and rose 0.4% over the month, which is up from 0.2% in December.

Shelter rose 0.4% over the month, accounting for nearly 30% of the monthly increase of the all-items index, and 4.4% over the year. Energy costs grew 1.1% over the month in January, with fuel oil leading the increase, rising 6.2%. Meanwhile, prices for gasoline rose 1.8% and electricity was unchanged from December. Prices for transportation services jumped 1.8% over the month and 8.0% over the year, with motor insurance leading the increase, surging 11.8% over the year.

Food price increases continue inching up, rising 0.4% over the month and 2.5% over the year in January. The food at home index grew 0.5% over the month, with the indexes for meats, poultry, fish and eggs rising 1.9% in January. Driven by the bird flu outbreak, the index for eggs alone increased 15.2% over the month and 53% over the year, the largest rise since June 2015 and accounting for two-thirds of the food at home index increase. Food away from home rose 0.2% in January but was up 3.4% over the year.

As the over-the-year headline rate has ticked up in previous months, markets are anticipating that the Federal Open Market Committee will keep rates steady at its meeting next month. This expectation was confirmed further in Federal Reserve Chairman Jerome Powell’s testimony to Congress last week where he said that the Fed is in no hurry to reduce its interest rate target.