The Federal Reserve's preferred measure of inflation rose 4.4% annually in December, down from 4.7% in November. This is the latest sign that the era of red-hot prices is coming to an end, and that the Fed may soon pivot to a less aggressive monetary policy stance.‍ The core personal-consumption expenditures (PCE) price index, also known as the core PCE deflator, rose 4.4% on an annual basis in December, in line with expectations of economists surveyed by FactSet.

Adding an extra layer of complexity, Mr. Powell has helped convince many investors that the labor market is the key to understanding the direction of inflation, making inflation data itself arguably less important.

‍Personal spending increased slightly in November, according to the latest data from the Commerce Department. Households boosted spending on services last month, offsetting a decrease in spending on goods, including autos. Overall, spending was up 0.1% from the previous month.