The Personal Consumption Expenditures Price Index ​increased 3.7% in the 12 months through June after advancing by an unrevised 4.1% in ‌May, which was the largest gain since April 2023, the Commerce Department's Bureau of Economic Analysis said on Thursday. The increase in PCE inflation was in line with economists' expectations.

The PCE Price Index slipped 0.1% on a month-over-month ​basis, the weakest reading since April 2020, after climbing 0.5% in May.

The data was ​included in the government's advance estimate of second-quarter gross domestic product, which ⁠was also published on Thursday. The moderation in PCE inflation reflected a retreat in oil prices ​amid a fragile U.S.-Iran ceasefire. The truce has since fallen apart.

Brent oil prices are hovering just above $90 ​a barrel, while average U.S. gasoline prices have risen back above $4 a gallon. Excluding the volatile food and energy components, the PCE Price Index rose 3.3% on a year-over-year basis in June after increasing 3.4% in May. ​Excluding food and energy, it edged up 0.1% over the month after gaining 0.3% in May.

The ​Federal Reserve tracks the PCE inflation measures for its 2% target. The U.S. central bank on Wednesday left ‌its benchmark ⁠overnight interest rate in the 3.50%-3.75% range. Three members of the Fed's policy-setting committee dissented in favor of a quarter-percentage-point hike.

Fed Chairman Kevin Warsh told reporters the central bank would not "waver" in its commitment to lower inflation back to target, emphasizing "there is no soft inflation target, there is ​no soft implicit target, ​not on this committee's ⁠watch."

Economists expect the Fed to raise borrowing costs as soon as September. The blow from high inflation has been softened by generous tax refunds ​this year, but that cushion is fading, setting up consumer spending ​for a second-half ⁠slowdown.

Consumer spending, which accounts for more than two-thirds of economic activity, rose 0.3% in June after surging 0.9% in May. When adjusted for inflation, consumer spending increased 0.4% in June, matching the rise in May.

Personal income ⁠rose ​0.2% after shooting up 0.7% in May. Income at the ​disposal of households after accounting for inflation rose 0.3% last month. The saving rate fell to 2.7%, the lowest level since ​June 2022, from 2.8% in May.