Inflation rose 2.5% over the year in January compared to 2.6% in December, marking the first decrease in four months.

The Federal Reserve’s preferred inflation gauge cooled as expected in January; however, the good news came with a red flag for the US economic engine: Consumers pulled back their spending by the most in nearly four years.

The Federal Reserve's key inflation gauge, the PCE price index, offers hope as the S&P 500 hits turbulence amid Trump tariff threats.

The Federal Reserve's preferred inflation gauge eased modestly last month, but personal-spending figures showed one of the biggest pullbacks in more than a year, suggesting further weakness in the domestic economy.