US inflation hits fastest pace in 4 years

US consumer prices in January rose at their fastest pace in nearly four years, a fresh sign that a pickup in inflation may be approaching, Labor Department figures showed Wednesday.

The consumer price index showed a 0.6 percent gain for the month, the third consecutive monthly acceleration and the largest increase since February 2013.

January also saw its largest 12-month CPI increase in nearly five years, rising 2.5 percent over January 2016. Even excluding the more volatile categories of food and energy, prices were still up by almost as much at 2.3 percent.

The new figures may help persuade US central bankers to tighten monetary policy more quickly this year after a decade of near-zero interest rates.

According to figures released Tuesday by the Labor Department, US wholesale inflation, or prices seen from the seller`s perspective, likewise saw their largest monthly gain in more than four years.

Janet Yellen, chair of the Federal Reserve, said in congressional testimony on Tuesday that rate hikes were on the horizon and could come at any time.

Yellen`s words affirmed the belief among analysts and market players that another increase could happen as soon as the next meeting of central bankers on March 14 and 15.

Almost half of January`s monthly increase in the consumer price index was driven by rising fuel prices, with the gasoline index up nearly eight percent while costs for housing, clothing and new cars also rose, according to the Labor Department.

The energy index also saw its largest 12-month gain since November 2011, adding 10.8 percent.

In separate figures also released Wednesday, the Commerce Department said a steep drop in auto sales weighed on the US retail sector in January, putting downward pressure on overall sales for the month.

Consumers in the United States shelled out a total $472.1 billion in January, a 0.4 percent increase over the prior month.

Auto sales, however, saw their sharpest decline in eight months, falling 1.4 percent. Excluding the more volatile auto category, the overall increase in retail sales for the month would have been twice as large at 0.8 percent.

Still, monthly sales were stronger than expected. Analysts had forecast growth of only 0.1 percent.

January was also considerably stronger than the same month last year, with sales up 5.6 percent by that measure.