An inflation gauge closely tracked by the Federal Reserve rose 6.3% in April from a year earlier, just below a four-decade high set in March and the first slowdown since November 2020.

Friday's report on the personal consumption expenditures (PCE) index from the Commerce Department added to other recent signs showing that while high inflation continues to cause hardships for millions of households, it may finally be moderating, at least for now.

The report also showed that consumer spending rose by a healthy 0.9% from March to April, outpacing the month-to-month inflation rate for a fourth straight time. The ongoing willingness of the nation's consumers to keep spending freely despite inflated prices is helping sustain the economy. Yet all that spending is helping keep prices high and could make the Fed's goal of taming inflation even harder.

On a month-to-month basis, prices rose 0.2% from March to April, down from the 0.9% increase from February to March.

Still, inflation remains painfully high, and it's inflicting a heavy burden in particular on lower-income households, many of them Black or Hispanic. Surging demand for furniture, appliances and other goods, combined with supply chain snarls, began sending prices surging about a year ago.

Consumers are now increasingly shifting their spending from goods to services, like airline fares and entertainment tickets. That trend could help cool inflation in the months ahead, though it's unclear by how much. The cost of such services as restaurant meals, plane tickets and hotel rooms is also rising.

Chair Jerome Powell has pledged to keep ratcheting up the Fed's key short-term interest rate until inflation is “coming down in a clear and convincing way.” Those rate hikes have spurred fears that the Fed, in its drive to slow borrowing and spending, may push the economy into a recession. That concern has caused sharp drops in stock prices in the past two months, though markets have rallied this week.

Powell has said the Fed is aiming for a “soft or soft-ish” landing, in which wages, consumer spending and growth slow, but the economy avoids a downturn. Most economists say that while such an outcome is plausible, they doubt it can be achieved.