WASHINGTON (AP) — The Federal Reserve’s favored inflation gauge accelerated slightly in August from a year earlier, but the so-called core inflation rate remained the same as the previous month.

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

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

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

Separately, the report showed that inflation-adjusted consumer spending rose 0.4 percent from July, the same as the month before, largely on a 0.7 percent increase in spending for goods; spending on services such as travel and dining out rose 0.2 percent.

“The resilience of the U.S. consumer was on show once again,’’ Michael Pearce of Oxford Economics wrote, though he cautioned that spending “is being driven by households at the top of the income distribution.’’

Incomes rose 0.4 percent, same as the month before inflation. Income for the self-employed and business owners rose 0.9 percent for the second straight month.

Wages and salaries rose 0.3 percent from July, dipping from a 0.5 percent increase the month before.

Inflation has come down since rising prices prompted the Fed to raise its benchmark interest rate 11 times in 2022 and 2023, but annual price gains remain above the central bank’s 2 percent target.

Last week, the Fed reduced the rate for the first time this year, lowering borrowing costs to help
a deteriorating job market, but it’s been cautious about cutting, waiting to see what impact President Donald Trump’s tariffs on imports have on inflation and the broader economy.

The Fed tends to favor the PCE inflation gauge that the government issued last week over the better-known consumer price index.

The PCE index tries to account for changes in how people shop when inflation jumps. It can capture, for example, when consumers switch from pricier national brands to cheaper store brands.

For months, Trump has pushed the Fed to lower rates more aggressively.

Last month, Trump sought to fire Lisa Cook, a member of the Fed’s governing board, in an effort to gain greater control over the central bank. She has challenged her dismissal in court, and the Supreme Court will decide whether she can stay on the job while the case goes through the judicial system.