The U.S. personal consumption expenditures price index, excluding food and energy, advanced by 1.9 percent in May from a year earlier, according to a government report on Friday that is likely to give the Federal Reserve some assurance it is making progress in its effort to curb inflation.
That was the lowest reading for the year-over-year core PCE price index, a closely watched inflation gauge, since a matching reading in March 2004, the Commerce Department said.
Also bolstering views on the economy was a stronger-than-expected report from National Association of Purchasing Management-Chicago. The group's index showed business activity in the U.S. Midwest expanded in June at a slightly slower, but still higher than expected pace.
The index eased to 60.2 from 61.7 in May. Prices paid fell to 68.1 from 70.2 and new orders slipped to 65.7 from 71.1.