An inflation gauge closely tracked by the Federal Reserve shows price pressures easing gradually

A measure of inflation that is closely tracked by the Federal Reserve slipped last month in a sign that price pressures continue to ease.

The government reported Friday that prices rose 0.3% from January to February, decelerating from a 0.4% increase the previous month in a potentially encouraging trend for President Joe Biden’s re-election bid.

Compared with 12 months earlier, though, prices rose 2.5% in February, up slightly from a 2.4% year-over-year gain in January.

Excluding volatile food and energy costs, so-called core prices rose 0.3% from January to February, down from 0.5% in the previous month. Core prices rose 2.8% from a year earlier last month, down from a revised 2.9% in January. Economists consider core prices to be a better gauge of the likely path of future inflation.

Annual inflation, as measured by the Fed’s preferred gauge, tumbled in 2023 after having peaked at 7.1% in mid-2022. Supply chain bottlenecks eased, reducing the costs of materials, and an influx of job seekers made it easier for employers to keep a lid on wage growth, one of the drivers of inflation.

Still, inflation remains stubbornly above the Fed’s 2% annual target, and opinion surveys have revealed public discontent that high prices are squeezing America’s households despite a sharp pickup in average wages.