Fears rattle markets.

Personal income rose in January more than expected, adding to signs that inflation is climbing and to speculation that the Federal Reserve will raise benchmark rates at a meeting later this month.

The measure climbed 0.4% in January from the prior month, the U.S. Commerce Department's Bureau of Economic Analysis said Thursday, exceeding economists' expectations of a 0.3% increase.

Personal consumption expenditures rose 0.2% from the prior month, in line with economists' expectations. 

Recent reports showing an acceleration in wage growth have sparked concerns over surging inflation, triggering volatility in stock and bond markets.

The Fed raised rates three times in 2017, bringing the target to a range of 1.25% to 1.5%, from near zero before the central bank starting the current hiking cycle in late 2015.

At a meeting in January, Federal Reserve officials kept interest rates steady at their first meeting of the year, saying that labor markets continue to strengthen amid "solid" economic activity.

Most traders view a rate increase later this month as a near certainty.