US consumer prices rise less than expected in January

STORY: A closely watched US inflation report showed prices rose less than expected in January, but underlying price pressures still exist.

The Consumer Price Index report from the Labor Department, released Friday, showed inflation ticked up 0.2% last month, slightly less than economists polled by Reuters had forecast.

Cheaper gasoline and a moderation in rents helped slow the monthly inflation rate.

But households still faced higher costs elsewhere, likely as businesses pushed through start-of-the-year price increases for goods and services, including personal care and airline fares.

The report follows on the heels of this week's nonfarm payrolls data, which showed an unexpected acceleration of job growth in January and a slight drop in the unemployment rate to 4.3%.

The combined data suggests little urgency for the Federal Reserve to resume cutting interest rates any time soon.

Still, Brad Bernstein, managing director at UBS Private Wealth Management, sees two interest rate cuts by the end of this year.

"We potentially see one at the June meeting and a second one by the September meeting. So we still see in the market still is pricing in two cuts this year. [FLASH] And we think we'll see in the next few months inflation data continue to improve, specifically in goods. Goods pricing will continue to get better in the first half of the year."

The overall lower-than expected inflation rate will be welcomed by President Donald Trump, whose approval ratings on the economy have taken a hit amid anxiety over jobs and still-elevated prices.