A highly anticipated report released by the Commerce Department on Thursday showed consumer prices in the U.S. increased in line with economist estimates in the month of January.

The Commerce Department said consumer prices rose by 0.3 percent in January after inching up by a revised 0.1 percent in December.

Economists had expected consumer prices to rise by 0.3 percent compared to the 0.2 percent uptick originally reported for the previous month.

Excluding food and energy prices, core consumer prices climbed by 0.4 percent in January after edging up by a revised 0.1 percent in December. The increase in core prices also matched estimates.

The core price growth partly reflected a notable increase by prices for services, which advanced by 0.6 percent in January after rising by 0.3 percent in December.

Meanwhile, the report said the annual rate of consumer price growth slowed to 2.4 percent in January from 2.6 percent in December. The slowdown matched expectations.

The annual rate of core consumer price growth also slowed to 2.8 percent in January from 2.9 percent in December, in line with estimates.

“Today’s report is modestly encouraging as the Fed seeks to bring inflation down to 2%,” said Mercatus Center macroeconomist Patrick Horan. “However, the Fed should keep an eye on nominal GDP growth, which is still too high to be consistent with sustained 2% inflation.”

He added, “If the Fed can continue to gradually bring down nominal GDP as it has over the past two years, then it will more likely achieve its inflation goal.”

The readings on inflation, which are said to be preferred by the Federal Reserve, were included in the Commerce Department’s report on personal income and spending in the month of January.

The Commerce Department said personal income jumped by 1.0 percent in January after rising by 0.3 percent in December. Economists had expected income to increase by 0.4 percent.

Disposable personal income, or personal income less personal current taxes, rose by 0.3 percent for the second consecutive month.

The Commerce Department also said personal spending crept up by 0.2 percent in January after advancing by 0.7 percent in December. The uptick in spending matched economist estimates.

Excluding price changes, personal spending edged down by 0.1 percent in January after climbing by 0.6 percent in December.

The report also said personal saving as a percentage of disposable personal income inched up to 3.8 percent in January from 3.7 percent in December.