U.S consumer prices increased by 0.2 percent in January, down from a 0.4 percent increase in the previous month, the Labor Department reported on Wednesday.

But the January rise in consumer prices, or inflation at the consumer level, was bigger than the 0.1 percent increase expected by analysts.

Data showed that energy prices declined 1.5 percent in January. Gasoline prices dropped by 3 percent from the previous month, 2.7 percent from a year ago and 32 percent from their peak last July.

Prices of natural gas and fuel oil were also down in January. But electricity costs increased by 2 percent.

Food prices rose by 0.7 percent, the biggest gain since the spring of 2005, as the cost of dairy products, fruits and vegetables all showed big gains in January.

Excluding volatile energy and food, the core consumer prices increased by 0.3 percent, the biggest gain since last June.

Medical care costs surged 0.8 percent, the biggest jump in more than 15 years, as costs for prescription drugs and doctor services rose in January at the fastest pace in 25 years.

Airline tickets jumped by 2.1 percent, the biggest gain since November 2004. Prices of tobacco products surged by 3.1 percent, the largest increase in 4.5 years.

For all of 2006, U.S. consumer prices increased by 2.5 percent, the smallest gain in three years, caused by big declines in energy costs in the second half of the year. Core prices rose by 2.7 percent over the past 12 months.

Source: Xinhua