A key inflation measure monitored by the US Federal Reserve showed prices cooling last month, in a sign that the central bank's interest rate increases are easing pressures.
The Price Consumption Expenditures price index increased 3.8 per cent on an annual basis in May, down from 4.3 per cent a month in April.
Core PCE, which excludes food and energy, rose 4.6 per cent on an annual basis, after a 4.7 per cent increase the previous month.
Friday's report comes as policymakers at the Fed consider whether to issue another pause on interest rate increases after doing so earlier this month.
The Fed has raised interest rates 10 times to the range of 5 to 5.25 per cent since March 2022 to bring down the high cost of goods.
Though inflation has fallen since its 9.1 per cent peak last summer, Fed Chair Jerome Powell says it still remains above the central bank's long-term target.
“Inflation pressures continue to run high, and the process of getting inflation back down to 2 per cent has a long way to go,” he said at a banking conference in Madrid on Thursday.
Friday's report comes after a string of strong economic data pointed towards another interest rate increase by the Fed.
A report released by the Commerce Department on Thursday sharply revised US economic growth to 2 per cent in the first quarter, while first-time jobless claims fell the most since October 2021.
Policymakers at the central bank had also suggested they expect to issue two more quarter-point interest rate increases this year after skipping June.
Forecasts released by the Fed earlier this month anticipate that PCE inflation will drop to 3.2 per cent by the end of the year.
