Core inflation using the Fed’s preferred gauge rose less than expected last month from January, key data released on Friday showed.

At the same time, personal spending came in below estimates and real personal spending contracted.

Taken together, the data was amenable to a dovish interpretation from a policy perspective, particularly as it suggested the economy was perhaps cooling at the margins even before a trio of bank failures changed the game.

Core PCE prices rose 0.3% MoM in February. Consensus expected a 0.4% increase. Better still, January’s MoM increase was revised lower to show a 0.5% gain versus the initially reported 0.6% advance.

The monthly headline print, at 0.3%, was in line.

The 0.2% increase in nominal spending missed estimates, and unrounded it was just half of the expected monthly gain.

The downshift will be welcome news for officials, although any “bad news is good news” spin is complicated by the distinct possibility that depending on how the regional bank crisis resolves (or doesn’t resolve), bad news could just be plain old bad within a few months.

For now, though, with emergency borrowing from the Fed apparently stabilizing+, we can celebrate evidence of cooler price growth and consumption as a sign that the rip-roaring January macro data might’ve been an aberration.

The increase in current-dollar spending was almost all services, with housing and health care leading the way. Notably, though, spending on food services and accommodations fell.

Taken at face value (and that was about as much as you could expect to get Friday from various media outlets who all focused on monetizing a presidential indictment), the figures will likely help make the case that the US economy wasn’t as hot as January’s data suggested.

That, in turn, means the Fed’s less aggressive approach (e.g., the new forward guidance and the unchanged median 2023 dot) is at least somewhat defensible, particularly in light of uncertainty around the banking sector.

On a YoY basis, headline and core PCE prices rose 5% and 4.6%, respectively, both below estimates.