U.S. consumer prices rose at the slowest pace in four months in February, welcome news for American households who remain apprehensive about the potential for tariffs to drive costs higher.

The consumer price index increased 0.2% after a sharp 0.5% advance in January, according to Bureau of Labor Statistics data out Wednesday. Excluding often volatile food and energy categories, the so-called core measure rose 0.2% as well.

The respite, driven in part by a drop in prices for cars and gas, may be short-lived. Economists anticipate that an escalating trade war will drive up prices on a variety of goods from food to clothing in the coming months, testing the resilience of consumers and the broader economy.

Though the CPI report is encouraging, it’s “old news” nonetheless, said Kathy Bostjancic, chief economist at Nationwide. “There’s no disinflation momentum right now,” she said. “We are predicting a little bit of a bump up in the coming months because of these tariffs.”

Southwest ends free bag policy

Southwest Airlines will begin charging customers a fee to check bags, abandoning a decadeslong practice that executives had described last fall as key to differentiating the budget carrier from its rivals.

The airline, which built years of advertising campaigns around its policy of letting passengers check up to two bags for free, said Tuesday that people who haven’t either reached the upper tiers of its Rapid Rewards loyalty program, bought a business class ticket or hold the airline’s credit card will have to pay for checked bags.

The airline did not outline the fee schedule but said the new policy would start with flights booked on May 28.

“We have tremendous opportunity to meet current and future customer needs, attract new customer segments we don’t compete for today, and return to the levels of profitability that both we and our shareholders expect,” CEO Bob Jordan said in a statement.

Egg prices begin to head down

U.S. egg prices are finally showing signs of relief after a nearly 60% surge over the past year has made shoppers reluctant to buy.

Egg prices jumped 10% on a seasonally adjusted basis in February from the previous month, bucking an overall trend of slowing food inflation, according to a U.S. Bureau of Labor Statistics report Wednesday.

The price skyrocketed to a record over the past 12 months amid a shortage of eggs due to the worst-ever outbreak of highly pathogenic avian influenza. However, prices have declined steeply in recent weeks as weakening demand gives supplies a chance to catch up, according to the U.S. Department of Agriculture.

New IRS counsel supports Musk

The Internal Revenue Service’s acting chief counsel, William Paul, has been removed from his role at the agency and replaced by Andrew De Mello, an attorney in the chief counsel’s office who is deemed supportive of Elon Musk’s Department of Government Efficiency, according to two people familiar with the plans who were not authorized to speak publicly.

The people said Paul was demoted from his position because he clashed with the DOGE’s alleged push to share tax information with multiple agencies. The news also comes as the IRS plans to institute massive cuts to its workforce.

The IRS is drafting plans to cut its workforce by as much as half through a mix of layoffs, attrition and incentivized buyouts as part of the President Donald Trump’s efforts to shrink the size of the federal workforce. The administration is closing agencies, laying off nearly all probationary employees who have not yet gained civil service protection and offering buyouts to almost all federal employees through a “deferred resignation program” to quickly reduce the government workforce.

Already, roughly 7,000 probationary IRS employees with roughly one year or less of service were laid off from the organization in February.

Paul was named acting chief counsel to the IRS in January, replacing Marjorie A. Rollinson, and has served in various roles at the IRS since the late 1980s.

Compiled from Associated Press and Bloomberg reports.