A key indicator of inflation for the Federal Reserve showed inflation eased slightly from a year ago in June, helping pave the way for an expected wide-ranging interest rate cut in September.
The personal consumption expenditures (PCE) price index rose 0.1% in the month and was up 2.5% from a year ago, in line with Dow Jones estimates, based on a Commerce Department report on Friday. The year-on-year increase in May was 2.6%, while the monthly measure was unchanged.
The Fed's policymakers use the PCE measure as their main basis for measuring inflation, which continues to grow above the central bank's long-term target of 2%.
Core inflation, which excludes food and energy, showed monthly increases of 0.2% and 2.6% this year, both also in line with expectations. Policymakers tend to focus more on core inflation as a better measure of long-term trends because gas and grocery costs tend to jump higher than other items.
The report also showed that personal income rose just 0.2%, below the estimate of 0.4%. Spending rose 0.3%, meeting forecasts.
The US dollar index which measures the greenback against six major currencies traded down 0.01% to trade at 104.097.
