WASHINGTON, July 26 (Xinhua) -- The U.S. personal consumption expenditures (PCE) price index, the Federal Reserve's preferred inflation measure, rose 2.5 percent in June compared with a year ago, as inflation continued to cool amid high interest rates, the Commerce Department reported on Friday.

The latest figure came after the measure ticked up from 2.5 percent in February to 2.7 percent in March, remained at 2.7 percent in April, and then dropped to 2.6 percent in May, according to the department's Bureau of Economic Analysis (BEA).

The PCE gauge takes into account how consumers change their behavior in light of higher prices, and is a broader measure of consumer behavior than the consumer price index (CPI).

The so-called core PCE price index, which strips out volatile food and energy prices, rose 2.6 percent in June from a year ago, in line with the figure in May and down from the 2.8 percent in previous months. The latest data is still well above the Fed's inflation target of 2 percent.

In the second quarter, the PCE price index increased 2.6 percent, compared with an increase of 3.4 percent in the first quarter, according to the bureau. Excluding food and energy prices, the PCE price index increased 2.9 percent in the second quarter, compared with an increase of 3.7 percent in the previous quarter.

Twelve-month core PCE inflation peaked at 5.6 percent in February 2022.

"While the U.S. by many measures is doing well even amid high rates, and the pace of inflation has cooled, many Americans are unhappy that prices for groceries, cars and homes are so much higher than they were a few years ago," The Wall Street Journal reported.

For Republican voter Paul, an Uber driver in Milwaukee, the economy is his biggest concern in the election. "Inflation is so severe that the price of a dozen eggs has risen from 4.99 dollars to 8.99 dollars ... Heating is too expensive, gas is too expensive, and interest rates are so high that I can't afford a house," he told Xinhua earlier this month.

The U.S. gross domestic product (GDP) growth rate sped up to an annual rate of 2.8 percent in the second quarter of this year, the U.S. Department of Commerce reported in an "advance" estimate released on Thursday.

"Today's stronger than expected GDP numbers make it very unlikely that the Fed will start cutting interest rates at next week's policy meeting," Desmond Lachman, a senior fellow at the American Enterprise Institute and a former official at the International Monetary Fund, told Xinhua Thursday.

The Fed's next meeting is scheduled for July 30-31. The Chicago Mercantile Exchange (CME) Group's FedWatch Tool, which acts as a barometer for the market's expectation of the Fed funds target rate, showed that the probability of the Fed maintaining rates at the July meeting is over 95 percent as of Thursday. Enditem

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