Minneapolis CNN  — 

The inflation gauge tracked most closely by the Federal Reserve showed that the pace of price increases slowed last month, according to Commerce Department data released Friday.

The Personal Consumption Expenditures price index rose 3% for the 12 months ended in June, a cooldown from the 3.8% rate posted in May.

When stripping out energy and food prices, the core PCE index showed prices increased 4.1% in June from the year before. Economists were expecting the core index to increase 4.2% on an annual basis. In May, the core PCE rose 4.6% annually.

On a monthly basis, the headline and core indexes both rose 0.2%.

The report also showed that consumer spending picked up for the month by 0.5%. In May, spending ticked up by a revised 0.2%. When adjusting for inflation, spending increased 0.4%, driven by a surge in goods-related purchases, specifically of new trucks and recreational products and vehicles, according to the report.

The PCE indexes are part of the Personal Income and Outlays report, which provides a more comprehensive look at shifts in prices, including how consumers respond to them and how much consumers are spending, bringing in and saving.

The Fed uses the core PCE index as the benchmark for its 2% inflation target. Earlier this week, the US central bank raised rates by a quarter point, taking them to the highest level in 22 years.

This story is developing and will be updated.