The Federal Reserve's preferred inflation gauge showed that prices increased slightly in June as the central bank continues to monitor for signs of tariff-induced inflation impacting consumers.
The Commerce Department on Thursday reported that the personal consumption expenditures (PCE) index rose 0.3% on a monthly basis and 2.6% from a year ago, with the headline figure above the estimate of economists polled by LSEG. Those figures mark accelerations from last month's readings of 0.1% and 2.3%.
Core PCE, which excludes volatile food and energy prices, was up 0.3% on a monthly basis in June and 2.8% from a year ago, with the annual figure coming in above estimates. On an annual basis, core PCE ticked higher from 2.7% last month, while the monthly figure was also up from the 0.2% reading in May.
Federal Reserve policymakers are focusing on the PCE headline figure as they try to bring inflation back to their long-run target of 2%, though they view core data as a better indicator of inflation. Headline PCE rose from 2.3% to 2.6% in June, while core PCE also rose from 2.7% to 2.8%.
Prices for goods were up 0.6% in June from a year ago. Durable goods rose 0.9% from last year and nondurable goods were up 0.5% over that period.
Services prices were 3.5% higher in June when compared with last year.
Wages and salaries increased 0.1% on a monthly basis in June, which was the slowest monthly growth since at least November.