May PCE: Fed's preferred inflation gauge rises 0.1% higher than expected

June 27 (UPI) -- The U.S. Bureau of Economic Analysis announced Friday that core inflation jumped higher than expected last month.

The BEA said in a press release that the personal consumption expenditures, or PCE, price index for May rose 0.1%, and if food and energy are excluded from the data, the index rose 0.2%.

This bumps the annual inflation rate up to 2.3%, or 2.7% when food and energy are left out of the math.

Economists surveyed by Dow Jones had been expecting the 0.1% and 2.3% but only estimated the numbers would hit 0.1% and 2.6% minus energy and food.

"This morning's news was consistent with other reports showing the economy gradually losing momentum in the second quarter," said Wells Fargo Investment Institute market strategist Gary Schlossberg to CNBC Friday.

Schlossberg added that this was "ahead of the brunt of tariff increases expected to wash ashore during the summer and early fall."

The inflationary uptick got its biggest boost from service prices, which are 3.4% higher than a year ago, while goods only moved upwards by 0.1%.

Inflation pressures in May showed a 0.2% price increase in food, but that was balanced by a 1% decline in energy-related goods and services costs. Shelter prices, on the other hand, went up 0.3%.

The BEA also reported Friday that personal income decreased $109.6 billion in May, or 0.4% at a monthly rate. When personal current taxes are subtracted from personal income, the current disposable personal income, or DPI, went down around $125 billion, or 0.6%.