U.S. consumer prices climbed more than expected in February as energy costs bounced back from a January drop and food prices climbed at the steepest rate in nearly two years, a Labor Department report on Friday showed.

The Consumer Price Index increased 0.4 percent after a 0.2 percent January rise, while core prices that exclude food and energy items were up 0.2 percent following a 0.3 percent January gain.

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Wall Street analysts had forecast a more moderate rise of 0.3 percent in overall consumer prices although the core price rise was in line with forecasts.

On a year-over-year basis, core prices were up 2.7 percent, likely enough to keep Federal Reserve policy-makers wary about potential inflation when they hold a two-day policy-setting meeting next Tuesday and Wednesday where they are expected to again keep interest rates on hold.

Energy prices climbed 0.9 percent in February, a peak winter heating period, after registering a 1.5 percent decline in January. Natural gas prices jumped 5 percent last month, the largest monthly increase since October 2005 when they were up 14.2 percent.

Food prices continued to rise sharply, up 0.8 percent in February after a 0.7 percent January increase. It was the largest rise in overall food prices since a matching increase in April 2005.

Costs for fresh fruits and for vegetables each gained by 5.7 percent last month. The hike in fresh fruit prices was the sharpest in 18-1/2 years, since a 6.2 percent increase in July 1988.

Fed officials have said they expect inflation to moderate later in the year but have indicated they stand ready to act by pushing interest rates higher if necessary to tamp down cost pressures.

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