The Federal Reserve’s preferred inflation gauge showed that prices ticked slightly higher in May as the central bank waits for signs of tariff-induced inflation reaching consumers this summer.

The Commerce Department on Friday reported that the personal consumption expenditures (PCE) index rose 0.1% on a monthly basis and 2.3% compared with a year ago. Those figures are largely in line with LSEG estimates, while the annual headline figure was up from 2.1% last month.

Core PCE, which excludes volatile food and energy prices, was up 0.2% from a month ago and 2.7% on an annual basis, slightly higher than LSEG estimates.

Federal Reserve policymakers are focusing on the PCE headline figure as they try to bring inflation back to their long-run target of 2%, though they view core data as a better indicator of inflation. Headline PCE was up from 2.1% in April, while core PCE also ticked higher from 2.5%.

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Prices for goods rose 0.1% on both an annual and monthly basis. Durable goods prices were flat compared with the prior month and 0.5% higher than a year ago, while prices for nondurable goods were up 0.1% for the month and down 0.2% from last year.

Services prices were 3.4% higher in May compared with a year ago.

Wages and salaries rose 0.4% on a monthly basis in May, little changed from the prior three months.

The personal savings rate as a percentage of disposable personal income was 4.5% in May, slightly lower than the 4.9% reading in April.

The Commerce Department’s PCE report comes as market watchers are monitoring for signs of a rebound in inflation driven by President Donald Trump’s tariffs.

The Federal Reserve has indicated it will wait for more data reflecting inflation and labor market conditions before making a decision on cutting interest rates, due in part to uncertainty over how tariffs will impact the economy.

This is a developing story. Please check back for updates.