U.S. consumer prices rose at an annual rate of 3% in January, up from 2.9% in December and higher than many analysts expected as inflation has generally been trending down for the past several months.

Figures compiled for the Labor Department’s consumer price index showed shelter costs such as rents continued to play a big role in raising household costs, accounting for 30% of overall increases from December price levels. January’s shelter costs by themselves rose 4.4% from a year earlier.

On an annual basis, food prices increased 2.5% in January and energy costs rose 1%, though gasoline prices were down 0.2%.

The effect of the latest inflation uptick on the Federal Reserve’s future interest rate decisions is yet to be seen, with the next rate-setting meeting scheduled for March 18-19. Fed Chair Jerome Powell told a U.S. House committee this week that the agency has made progress in taming inflation toward an optimal level of 2%, “but we’re not quite there yet.”

Analysts at Oxford Economics said January’s annual inflation came in higher than anticipated and could encourage the Fed to leave interest rates unchanged until late 2025, possibly December. The Fed will be weighing other factors, including the effects of new and pending tariffs on goods shipped from China, Mexico and Canada, which some economists predict will raise consumer prices.

“The Fed’s response to tariffs isn’t straightforward, but we don’t believe tighter monetary policy is likely as it would magnify the drag on the economy from tariffs,” Oxford Economics Chief U.S. Economist Ryan Sweet said in a statement Wednesday. 

Denny’s may speed up the pace of planned restaurant closings, after the restaurant chain continued to face sales struggles in its latest quarter, executives told analysts Wednesday.

“When we entered 2025, there was a feeling of the consumer stabilizing and a sense of normalcy ahead,” Denny’s Chief Financial Officer Robert Verostek told analysts during a conference call. “This was even in the face of horrific wildfires and snowstorms spanning across the U.S. and even into the Deep South.”

“Yet, there has been a shift in consumer sentiment and a slowing that persisted through the remainder of January and has seemingly accelerated in the last few weeks given the evolving macro environment,” Verostek said.

Excutives said Denny’s is currently on track to close 70 to 90 underperforming restaurants this year, after closing 30 during the fourth quarter of 2024. Those are part of plans announced in October to eventually shutter a total of about 150 stores with lagging sales over the coming year, though location lists have not been released.

Spartanburg, South Carolina-based Denny’s still operates more than 1,500 restaurants under the flagship brand and Keke’s Breakfast Café, which it acquired in 2022.

The company reported total revenue of $52.4 million for the quarter ended Dec. 25, down from $54 million in the year-earlier quarter; and net income of $6.8 million, up from $2.9 million a year earlier. The latest news of a slowdown led to Denny’s stock closing down nearly 24% for the day Wednesday. 

Online advertisements for job vacancies were back on the rise in January after a drop in late 2024, a potential sign that U.S. hiring could be picking up in coming weeks, according to the latest Conference Board data.

The economic research group and data firm Lightcast track online job postings among other gauges of the labor market, which remains healthy by historical standards. A Conference Board statement said data collected from more than 50,000 online job domains showed January postings up by a slight 0.3% on a month-over-month basis, after a 6.8% monthly drop in December.

The monthly report does not disclose the number of postings collected from online sources such as corporate job boards, social media platforms and other employment sites geared to niche industries or geographic regions.

The Labor Department reported January’s unemployment rate was 4%, down from 4.1% in December and remaining near 50-year lows, though job growth was muted at 143,000 positions. Also, job reductions have continued in several industries in the early weeks of 2025, especially technology, and January’s average annual wages across all industries were unchanged from December.