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 Consumer Price Index rose 2.9 percent from a year earlier, but a measure of underlying inflation was more encouraging.

U.S. inflation likely worsened last month on the back of higher prices for gas, eggs, and used cars, a trend that could make it less likely that the Federal Reserve will cut its key interest rate much this year.