A key inflation gauge tracked by the Fed slowed in February

WASHINGTON (AP) - 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.

The 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.

The report also showed that consumer spending rose 0.2% from January to February, a drop from a month earlier but an indication that households are still providing fuel for economic growth.