Rising prices continued to loom large in January, but new data released Thursday showed that inflation is still on a downward — albeit bumpy — path toward the Federal Reserve’s 2% target.

The Personal Consumption Expenditures price index was up 2.4% for the 12 months that ended in January, a slowdown from December’s 2.6% increase, according to Commerce Department data released Thursday. The closely watched core PCE index that excludes energy and food edged down to 2.8%.

While the latest read on the Fed’s preferred inflation gauge showed progress toward the central bank’s target, Thursday’s data also highlighted the choppiness of this yearslong battle to rein in spiking prices: Prices rose in January from December at their fastest clip in months.

On a monthly basis, the PCE price index rose 0.3% and core jumped 0.4%. In December, both indexes rose 0.1%.

Economists had projected the PCE index would rise 0.3% for the month and 2.4% for the 12 months ended in January and for the core index to jump 0.4% for the month and cool to 2.8% annually, according to FactSet.

The core PCE index, which Fed officials view as a crucial gauge of underlying inflation, rose at the fastest monthly pace since February 2023.

Thursday’s Personal Income and Outlays report also showed that consumers held back on some purchases in January. Spending rose 0.2% for the month, a cooling from the 0.7% leap a month prior.

However, when taking the inflated prices out of the equation, “real” spending dipped by 0.1% for the month as they bought far fewer goods (especially fewer trucks) and pulled back on some services purchases.

During the month, goods spending fell 1.1% while services spending increased 0.4%, according to the Commerce Department.

Household finances got a big boost to start the new year: Personal income surged by 1%, the largest monthly gain since July 2021, data shows.

Disposable income grew 0.3%, and the savings rate inched up to 3.8% from 3.7% the month before.