WASHINGTON—U.S. inflation picked up last month as gas prices rose sharply, though price gains for other items were more muted.The consumer price index rose 0.4% in December from November and finished the year up 2.

U.S. inflation accelerated last month as prices for gas, eggs, and used cars rose, yet underlying price pressures also showed signs of easing, bolstering hopes that the Federal Reserve could still cut its key interest rate this year.

Inflation probably picked up in late 2024, fueled by robust household spending amid a strong economy. A key gauge of inflation — the consumer price index — is expected to show Wednesday morning that prices rose by 2.

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 December inflation report shows that inflation rose by 0.4% month over month and 2.9% year over year. NBC News' Brian Cheung and Editor-in-Chief at Investopedia Caleb Silver break down the latest economic data.

Consumer Price Index showed an acceleration to 2.9%, the highest rate since July. With such high inflation, the Fed is unlikely to cut rates in January.

The Indian rupee is likely to open marginally higher on Wednesday as the dollar retreats in the lead up to U.S. inflation data that will give cues on the direction of U.S. interest rates. The 1-month non-deliverable forward indicated that the rupee will open at 86.