The decline in the personal consumption expenditures index from 2.6% the month before was in line with expectations.

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.