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 slowdown from the 3.8% rate posted in May. On a monthly basis, prices increased 0.2%, according to the report.

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.

The report also showed that consumer spending picked up for the month by 0.5%. In May, spending ticked up a mere 0.1%.

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.