WASHINGTON | The Federal Reserve’s favored inflation gauge accelerated slightly in August from a year earlier.

The Commerce Department reported Friday that its personal consumption expenditures (PCE) price index was up 2.7% in August from a year earlier, a tick higher from a 2.6% year-over-year increase in July and most since February.

Excluding volatile food and energy prices, so-called core PCE inflation showed a 2.9% increase in prices from August 2024, same as in July. The increases were what forecasters had expected.

Prices rose 0.3% from July, compared to a 0.2% increase the month before. Core prices rose 0.2%, same as in July.

Separately, the report showed that inflation-adjusted consumer spending rose a healthy 0.4% from July, same as the month before, largely on a 0.7% increa

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