The Federal Reserve's preferred inflation gauge eased modestly last month, but personal-spending figures showed one of the biggest pullbacks in more than a year, suggesting further weakness in the domestic economy.

The U.S. Bureau of Economic Analysis reported a rise in personal income for January, while personal outlays and consumption expenditures saw a decline.

The Federal Reserve’s preferred inflation gauge cooled as expected in January; however, the good news came with another potential red flag for the US economic engine: Consumers pulled back their spending by the most in nearly four years.