The US personal consumption expenditures price index (PCE), excluding food and energy, advanced by 1.9 per cent last month from a year earlier, according to a government report today.
It was the lowest reading for the year-on-year core PCE price index, a closely watched inflation gauge, since a matching reading in March 2004, the Commerce Department said.
This latest reading should provide some comfort to Federal Reserve policy-makers who yesterday opted to hold interest rates steady but warned that inflation was a key concern.
Treasury prices extended gains after the data, while the dollar was little changed, and US stock index futures rose. The core personal spending price index advanced by 0.1 per cent from a month ago, and that was in line with economists' expectations.
Personal income advanced by a lower-than-expected 0.4 per cent in May after a 0.2 per cent decrease in April.
