The cost of goods and services rose a scant 0.1% in May and pointed to a gradual easing in U.S. inflation, but prices are still rising sharply in key parts of the economy.
The increase in the personal consumption expenditures index matched the Wall Street forecast. The PCE index is the Federal Reserve's preferred inflation barometer.
The increase prices over the past year slowed to 3.8% from 4.3% and dropped to the lowest level in two years, the government said Friday. Waning gas and food prices have played a big role in restraining inflation this year.
A separate gauge that omits food and energy rose a sharper 0.3%, however. Wall Street expected a 0.3% increase.
The rise in the so-called core PCE rate of inflation over the past year dipped to 4.6% from 4.7%. It's fallen more slowly than the headline number and suggests inflation is likely to persist for some time.
The core PCE rate is viewed by the Fed as the best predictor of future inflation trends.
Source : MarketWatch
