Wholesale prices rose less than expected in December, a positive sign for the economy amid recent market fears that inflation isn't falling as quickly as hoped to the Federal Reserve's 2% target. Tuesday's report from the Bureau of Labor Statistics showed that its producer price index (PPI) — which tracks the price changes companies see — rose 3.

Wholesale prices rose a seasonally adjusted 0.2% in December, half of what Wall Street forecasters believe would jump while the rate for the core producer price index over the same period remained flat,

U.S. inflation picked up last month as gas prices rose sharply, though price gains for other goods were more muted.

Inflation moved up for a third month in a row, rising two-tenths of a percentage point to 2.9% for the year ending in December, adding to signs that the Federal Reserve may have to keep interest rates higher for longer.