A key inflation gauge moved higher in May in the latest sign that prices remain stubbornly elevated while Americans also cut back on their spending last month.

Prices rose 2.3% in May compared with a year ago, up from a 2.1% pace in April, the Commerce Department said Friday. Excluding the volatile food and energy categories, core prices rose 2.7% from a year earlier, an increase from 2.6% the previous month. Both figures are modestly above the Federal Reserve’s 2% target. The Fed tracks core inflation because it typically provides a better guide to where inflation is headed.

At the same time, Americans cut back on spending over the month for the first time since January, as overall spending fell 0.1%. Incomes dropped a sharp 0.4%. Both figures were distorted by one-time changes: Spending on cars plunged, pulling down overall spending, because Americans had moved more quickly to buy vehicles in the spring to get ahead of planned tariffs.

And incomes dropped after a one-time adjustment to Social Security benefits had boosted payments in March and April. Social Security payments were raised for some retirees who had worked for state and local governments.

Still, the data suggest that growth is cooling as Americans become more cautious, in part because President Donald Trump’s tariffs have raised the cost of some goods, such as appliances, tools, and audio equipment.

Consumer spending rose just 0.5% in the first three months of this year and has been sluggish in the first two months of the second quarter.

And spending on services ticked up just 0.1% in May, the smallest montly increase in four and a half years.

Spending on airfares, restaurant meals, and hotels all fell last month, Friday’s report showed.

On a monthly basis, inflation was mostly tame. Prices rose just 0.1% in May from April, according to the Commerce Department, the same as the previous month. Core prices climbed 0.2% in May, more than economists expected and above last month’s 0.1%. Gas prices fell 2.6% just from April to May.

Economists point to several reasons for why Trump’s tariffs have yet to accelerate inflation, as many analysts expected.

— Associated Press