Feb. 21 (Bloomberg) -- Consumer prices in the U.S. rose more than forecast last month even as energy costs declined, suggesting inflationary pressures won't dissipate quickly.

The consumer price index increased 0.2 percent after rising 0.4 percent in December, the Labor Department said today in Washington. Prices excluding food and energy rose 0.3 percent, the most since June, after a 0.1 percent gain.

Treasury yields rose as the figures suggested lower energy costs have yet to damp price pressures as Federal Reserve policy makers had forecast. Fed Chairman Ben S. Bernanke told lawmakers last week that the central bank's ``predominant'' concern is that inflation may not ease.

``This is kind of a wake-up call,'' said Mickey Levy, chief economist at Bank of America Corp. in New York. Inflation ``is sticky, so it's still on the front burner of concerns for the Fed,'' he said.

Economists had forecast the consumer price index to rise 0.1 percent, according to the median of 77 forecasts in a Bloomberg News survey. Estimates ranged from a decline of 0.4 percent to a gain of 0.3 percent. Last week, the government issued annual revisions to the data.

The yield on the Treasury's benchmark 10-year note increased 2 basis points to 4.69 percent, at 8:33 a.m. in New York.

Prices excluding food and energy, the so-called core rate of inflation, were forecast to rise 0.2 percent. Estimates ranged from gains of 0.1 percent to 0.3 percent.

Year-Over-Year Core Rate

Core consumer prices increased 2.7 percent during the 12 months ended in January, the biggest year-over-year rise since October, after a 2.6 percent rise for the period ended in December.

A similar measure, the personal consumption expenditures index minus food and energy, the Fed's preferred gauge, rose 2.2 percent in December from a year earlier, matching the prior month's figure as the smallest since May, the Commerce Department reported on Feb. 1.

The gauge has been at or above Bernanke's ``comfort'' range of 1 percent to 2 percent for 33 months. Bernanke, in his semiannual testimony to lawmakers last week, indicated that the Fed's ``predominant'' concern remains that inflation may not ease as anticipated.

``If inflation becomes higher for some reason, then the Federal Reserve would have to respond to it,'' Bernanke said in response to questions from House Financial Services Committee Chairman Barney Frank of Massachusetts.

Medical Care Costs

The cost of medical care increased 0.8 percent in January, the biggest gain since August 1991, after a 0.2 percent rise in December. Prescription drug costs also rose by the most since August 1991, and physicians' services jumped 1.2 percent, the biggest gain since October 1981.

The price of airfares increased 2.1 percent, the most since November 2004. The cost of tobacco products jumped 3.1 percent, the most since June 2002.

Fed policy makers, seeking to subdue inflation without hurting growth, held the benchmark interest-rate target unchanged at 5.25 percent the past five meetings. Bernanke told lawmakers that lower prices for oil, commodities and rent will help push down the preferred inflation gauge to within his comfort zone next year.

Today's report showed energy prices fell 1.5 percent, after a 4.2 percent increase in December. Gasoline prices dropped 3 percent. Fuel oil costs declined 5.6 percent and natural gas prices fell 3 percent.

Broadest Measure

The consumer price index is the government's broadest gauge of costs for goods and services. Almost 60 percent of the CPI covers prices that consumers pay for services ranging from medical visits to airline fares and movie tickets.

New vehicle prices were unchanged and clothing costs rose 0.3 percent.

Food prices, which account for about a fifth of the CPI, increased 0.7 percent after no change in December. Prices rose for fruits and vegetables after a freeze last month in California.

Housing costs, which include some energy costs and account for one-third of the total consumer price index, rose 0.2 percent after increasing 0.4 percent a month earlier.

Rising rents, which make up almost 40 percent of the core CPI, have been stoking inflation as less affordable home prices make renting more attractive.

To contact the reporter on this story: Shobhana Chandra in Washington at schandra1@bloomberg.net

Last Updated: February 21, 2007 09:02 EST