U.S. applications for unemployment benefits fell to their lowest level in more than three years last week, potentially complicating the Federal Reserve’s upcoming decision on interest rates.

The Federal Reserve kept its key interest rate unchanged Wednesday, brushing off President Donald Trump’s demands to lower borrowing costs, and said that the risks of higher unemployment and higher inflation have risen.

US Fed Chair Jerome Powell says the Trump administration’s expansive new tariffs will likely lead to higher inflation and slower growth.

A Minnesota farmer worries about the price of fertilizer.

With inflation still elevated, Federal Reserve officials expressed caution at their last meeting about cutting interest rates too quickly, adding to uncertainty about their next moves.

After reaching 40-year highs over the summer, price increases in the U.S. are now steadily easing.

Growth in the services sector, where most Americans work, slowed in August after setting a record pace in July.

The Labor Department reported on Thursday, Dec. 10, that the gain in the consumer price index followed an unchanged reading in October and matched the 0.2% September advance. (AP Photo/David Zalubowski)WASHINGTON – U.S. consumer prices increased 0.4% in February, the biggest gain in six months, led by a sharp jump in gasoline prices. The Labor Department said Wednesday that the February advance in its consumer price index followed a 0.3% rise in January and was the largest advance since a similar 0.4% increase in August. Consumer prices are up 1.7% over the past year, a still moderate performance for inflation which is running below the Federal Reserve’s 2% target for price increases. Gasoline costs have been climbing since December, reflecting rising costs of crude oil.

U.S. consumer prices were unchanged in October, the lowest reading in five months and an indication that the price spike seen this summer is beginning to fade as coronavirus cases start to increase. (AP Photo/Rogelio V. Solis)WASHINGTON – U.S. consumer prices rose 0.3% in January, led by a surge in energy. But even though the gain was the biggest monthly increase since July, inflation gains over the past year have remained modest. Core inflation, which excludes volatile food and energy costs, is also up 1.4% with core prices unchanged in January. “Consumer price inflation remains very tame,” said Kathy Bostjancic, chief U.S. financial economist at Oxford Economics, predicting that the upcoming rise in year-over-year inflation figures should be transitory.