WASHINGTON —

The Federal Reserve is closely watching new inflation data released Friday amid concerns of a price spike and an uncertain job market.

The focus is on core inflation, which excludes the volatile costs of food and energy. The Federal Reserve has maintained higher interest rates to curb inflation, but a shaky job market may prompt a reconsideration of this approach. Latest Forecast

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Federal Reserve Chair Jerome Powell said, "Risks to inflation are tilted to the upside, and risks to employment to the downside — a challenging situation."

Powell has indicated that the board may lower interest rates next month, even though inflation remains above its 2% annual target. Friday's data showed a 2.9% increase in prices compared

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