The consumer price index (CPI) rose 2.9 percent year-over-year in December, the largest annual increase since July. When stripping out the more volatile food and energy sectors, core inflation slowed to 3.2 percent, from 3.3 percent.

Overall inflation in the United States accelerated for the third-straight month in December. But the core consumer price index increased slightly less than expected, raising the prospect of another interest-rate cut.