The US Federal Reserve's preferred inflation measure was largely unchanged last month, according to government data published Friday, but a widely-scrutinized gauge of underlying price pressures rose.
The personal consumption expenditures (PCE) price index rose 2.5 percent in the 12 months to February, the Commerce Department said in a statement, unchanged from a month earlier. Inflation rose 0.3 percent on a monthly basis.
Both measures were in line with the median forecasts from economists surveyed by Dow Jones Newswires and The Wall Street Journal.
But in more concerning news for Fed officials, an inflation measure stripping out volatile food and energy costs rose more than expected, by 0.4 percent month-on-month, and by 2.8 percent from a year ago.
"The data support our view that downside risks to the economy are emerging, but with inflation heating up, the Fed for now will maintain its wait-and-see approach," Nationwide chief economist Kathy Bostjancic wrote in a note to clients.
The Fed is attempting to return inflation to its long-term target of two percent. Friday's data suggests policymakers still have some way to go as they also grapple with the effect of trade policy uncertainty.
US President Donald Trump has embarked on a stop-start rollout of country- and sector-specific tariffs, drawing condemnation from allies and warnings from Fed officials that the measures will likely push up prices.
"It looks inevitable that tariffs are going to increase inflation in the near term," Boston Fed President Susan Collins -- who has a vote on the US central bank's rate-setting committee this year -- said Thursday.
Earlier this month, the Fed voted to extend a pause in rate cuts, holding its key lending rate at between 4.25 and 4.50 percent.
Financial markets see a roughly 90 percent chance that the Fed will vote to continue that pause at its next rate meeting in May, according to CME Group.
Personal income increased by 0.8 percent last month, according to the Commerce Department data published Friday.
And personal saving as a percentage of disposable personal income -- a measure of how much consumers are saving -- jumped to 4.6 percent last month, up from a revised 4.3 percent a month earlier.
The jump in the personal savings rate since the start of the year may be related to consumer confidence which has deteriorated sharply in recent months, with consumers more likely to save money if they are concerned about where the economy is headed.