Consumer prices rose slightly more than expected in February, the

Labor Department's

latest release of the

Consumer Price Index shows.

The CPI, a measure of inflation at the consumer level,

gained 0.3% last month. It was expected to climb only 0.2%, compared to a 0.6% hike in January. The core CPI, which excludes volatile food and energy prices, also rose 0.3%. It was expected to gain only 0.2%, so the data shows a hint of inflation.

Stock futures dipped after the report was released because higher inflation would make it harder for the

Federal Reserve to continue being aggressive about interest rates. The data comes one day after the

Fed lowered interest rates by half a percentage point, its third rate reduction since the beginning of the year.

Investors responded with a jab and a punch, sending stocks tumbling to still further lows, because

they'd wanted a bigger rate cut.

The January CPI report had come in surprisingly strong. It rose 0.6% in January, double the 0.3% rate expected by economists. The core rate rose 0.3%, also higher than the expected increase.

The

Producer Price Index rose 0.1% in February, while the core rate, which excludes volatile food and energy prices, fell 0.3%. The PPI, a key indicator of inflation at the producer level, has been rising slowly on a year-over-year basis, but the recent report showed that the recent slowing in economic activity has served to restrain inflation, at least at the producer level.