Separately, a report showed USA retail sales decreased 0.3 percent last month, the biggest fall in almost a year and a surprise drop compared with economists' expectations of a 0.2 percent increase.
Producer prices are expected to climb by 0.4%, while core producers prices are expected to rise by 0.2%.
The core inflation, which excludes volatile food and energy prices, increased 0.3 percent in January, and rose 1.8 percent over the past year. A pickup in wage growth as the labor market hits full employment is expected to contribute to higher inflation.
Investors dumped stocks and bonds in the wake of the report, but stock indexes later rebounded.
"However, elevated fuel prices and the base effect will keep CPI inflation in the vicinity of 5% for the rest of the year till March", said Madan Sabnavis, chief economist at Care Ratings, adding that cooling food prices will have a calming effect on retail inflation.
By 9:10 a.m. ET, Dow e-minis were down 152 points, or 0.62 percent, with 81,595 contracts changing hands. And while the University of MI measure of household inflation expectations in the U.S. edged up to 2.5% in January, this is still below its average level since the financial crisis.
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With markets, especially stocks, already on tenterhooks about the potential for a sharp lift in inflationary pressures following an acceleration in wage pressures in January's USA non-farm payrolls report, it carries the potential to either calm those fears or make them a whole lot worse. "The growth in the cost of raw materials also slowed, with the prices of some imported materials falling". YoY basis the growth has revived to 7.1%.
All major US stock market indexes fell in the first weeks of February. Women's apparel costs jumped a record 3.4 percent, the report showed.
U. S stock futures fell more than 1 percent after the data was released at 8:30 a.m. ET.
Gasoline prices rose 5.7 percent last month, pushing up the headline index.
Principal Economist with ICRA Aditi Nayar also opined that it remains "somewhat premature" to attribute the recent double-digit growth in capital goods to a pickup in investment activity. Petrol inflation from hovering at around 4.6% last December is down to 2% last month.
The 1.8 percent increase in core prices is still below the Fed's 2 percent target. However, the inflation rate was still seen to have slipped down for the second month in a row which was interpreted by the market to be the right direction where the inflation should be headed.