The US Federal Reserve's preferred inflation measure, the personal consumption expenditures (PCE) price index, increased by 2.3 percent in May compared to the previous year, according to government data released on Friday.

This mild uptick was slightly higher than April's 2.2 percent increase and reflects a relatively modest acceleration.

The PCE price index, excluding food and energy sectors, rose by 2.7 percent in May from April's 2.6 percent uptick, as reported by the Commerce Department.

However, consumer spending declined due to the impact of tariffs imposed by President Trump earlier this year on consumer sentiment.

Despite Trump's imposition of tariffs on most US trading partners since his return to the White House in January, inflation has been relatively unaffected so far.

This is partly because he delayed some of his harshest tariff measures and businesses are still working through inventory stockpiled in anticipation of these levies.

Central bank officials have not rushed to cut interest rates, choosing instead to wait and observe the impact of recent tariffs over the summer.

Economists warn that while tariffs introduced in 2018 showed intense pass-through effects on consumer prices three to six months after implementation, current weakness in consumer spending, particularly in auto purchases and discretionary services such as travel and hospitality, reflects a decline in consumer sentiment.

The upcoming July deadline for higher tariff rates has heightened concerns about the potential for more lasting trade deals with Washington.

For now, despite slowing economic growth, there are risks that inflation could increase, which may keep the Federal Reserve on hold regarding interest rate cuts until later in the year.