A key inflation gauge tracked by the Fed slowed in February

The Federal Reserve’s favored inflation gauge slowed sharply last month, an encouraging sign in the Fed’s yearlong effort to cool price pressures through steadily higher interest rates, according to an Associated Press report.

Friday’s report from the Commerce Department showed that consumer prices rose 0.3% from January to February, down from a 0.6% increase from December to January. Measured year over year, prices rose 5%, slower than the 5.3% annual increase in January.

Excluding volatile food and energy prices, so-called core inflation rose 0.3% from January and 4.6% from a year earlier. Both reflected slowdowns from the previous month. The Fed is believed to pay particular attention to the core measure as a gauge of underlying inflation pressures.

The report also showed that consumer spending rose 0.2% from January to February, a drop from a hefty 2% increase a month earlier.

Taken as a whole, Friday’s figures show that inflation pressures, though easing gradually, still maintain a grip on the economy.