Washington: The Federal Reserve's preferred inflation measure cooled slightly to 2.5 percent in January, according to government data published Friday, as underlying price pressures eased.
The personal consumption expenditures (PCE) price index rose 2.5 percent in the 12 months to January, the Commerce Department said in a statement, down slightly from a month earlier. Inflation rose 0.3 percent on a monthly basis.
This was in line with the median forecasts from economists surveyed by Dow Jones Newswires and The Wall Street Journal.
Stripping out volatile food and energy costs, the so-called core index rose by 0.3 percent from a month earlier, and by 2.6 percent from a year ago -- down slightly from December.
While inflation has remained stuck above the bank's long-term two percent target, economic growth has remained robust, and the labor market has stayed healthy, with unemployment hugging close to historic lows.
The Fed recently voted to pause rate cuts, holding its key lending rate at between 4.25 and 4.50 percent and signaling it expects a slower pace of cuts ahead.
Friday's data is unlikely to change the Fed's current plan of action, given where the inflation data remains.
Personal income rose 0.4 percent in January from a month earlier, the Commerce Department said, while personal saving as a percentage of disposable personal income was unchanged at 3.8 percent.
Given inflation remains elevated, financial markets still overwhelmingly expect the Fed's to pause rate cuts again next month, according to data from CME Group.
