The US consumer price index rose by 0.2% in January raising concerns about the economy's growth prospects. Analysts had expected a figure around 0.1%.
In spite of falling energy prices, rising prices of air travel, food and medical care, pushed inflation to its highest level since October 2006.
Core inflation, which excludes food and energy stood at 0.3% - a figure which again was higher than the expectations.
On the other hand, the Conference Board's index of leading economic indicators rose by a mere 0.1% in January. The index had increased by 0.6% in December. The ailing housing and auto sectors are now clearly affecting growth in US.
Rising inflation would make it difficult for the Federal Reserve to cut interest rates in the future. Both US treasuries and stocks moved lowered - reacting to the release of these two crucial figures. NYSE's Dow Jones industrial average fell 48.23 points and closed at 12,738.41.
