Inflation is headed in the wrong direction and Americans have grown more cautious about how much they spend — not a good omen for the U.S. economy.

An inflation gauge closely watched by the Federal Reserve remained high last month even before the impact of most tariffs has been felt

It also didn’t help that the latest data showed US consumer sentiment tumbled to a more than two-year low while long-term inflation expectations jumped to a 32-year high as American anxiety over Trump’s handling of the economy continues to build.

U.S. personal income and consumption both rose in February, the Commerce Department said Friday. But the Fed's preferred metric for core inflation increased farther above the central bank's target. Incomes climbed by 0.

Inflation remains a top economic concern for most Americans, even as it has fallen sharply from its 2022 peak.

Economists had forecast the PCE price index gaining 0.3%. Stripping out the volatile food and energy components, the price index rose 0.4% after an unrevised 0.3% advance in January. In the 12 months through December,

U.S. consumer spending rebounded less than expected in February while a measure of underlying prices increased by the most in 13 months, stoking fears the economy was facing a period of tepid growth and high inflation amid an escalation in trade tensions.

An inflation gauge closely watched by the Federal Reserve remained high last month even before the impact of most tariffs has been felt. Americans’ spending rebounded in February after a steep fall last month and incomes increased.

The Federal Reserve’s preferred inflation measure showed underlying price pressures persisting in February, as inflation-adjusted spending stayed muted.

The bureau has been in turmoil as the Trump administration moved to fire hundreds of employees, ordered the rest to stop working and closed offices.

Judge Amy Berman Jackson issued a preliminary injunction to stop Trump's administration from dismantling the Consumer Financial Protection Bureau.

A federal judge is blocking the dismantling of the Consumer Financial Protection Bureau, finding the Trump administration acted "completely in violation of law" when it attempted to shutter the organization.

Federal judge blocks Trump administration's attempt to shut down CFPB, ensuring the regulator’s survival amid a lawsuit.

A federal judge granted a preliminary injunction that preserves the Consumer Financial Protection Bureau's existence, reinstates fired employees, contracts, data and operational capacity.

This story is developing. Please check back for updates.

A warning about waning consumer confidence has hit shares in Lululemon, despite a strong set of results from the activewear company. Lululemon stock recently stood nearly 13% lower at under $299, in active premarket trading.

Lululemon reported a strong fourth quarter where revenue increased 13%. But the popular active-wear retailer had a modest outlook for this year based on uncertainty about tariffs and lower consumer spending.

Lululemon Athletica said on Thursday that economic uncertainty was dampening demand for its pricey athleisure apparel and U.S. tariffs on imports from China and Mexico had squeezed its forecast for the year.