In May, inflation slowed to its lowest annual rate in over three years, according to a key economic measure for the Federal Reserve.

The core personal consumption expenditures price index rose by a seasonally adjusted 0.1% for the month and 2.6% from a year ago, down 0.2 percentage points from April, as reported by the Commerce Department.

These figures matched Dow Jones estimates and marked the lowest annual rate since March 2021.

Headline inflation, including food and energy, remained flat for the month and also increased by 2.6% annually, aligning with expectations, CNBC has reported.

Additionally, the Bureau of Economic Analysis reported that personal income rose by 0.5% in May, surpassing the 0.4% estimate, while consumer spending increased by 0.2%, below the 0.3% forecast.

Prices were kept in check by a 0.4% decline in goods and a 2.1% drop in energy, which offset a 0.2% increase in services and a 0.1% rise in food.

Written by B.C. Begley