The personal consumption expenditures price index, the Federal Reserve's preferred inflation gauge, rose 0.1% in August, or 2.2% on an annualised basis, down from a 2.5% print in July and better than the 2.3% reading expected by economists.

Excluding volatile food and energy prices, core PCE rose 0.1% in August and was 2.7% higher year-on-year, just 0.1 percentage point higher than in July.

Elsewhere, personal income increased 0.2% on the month, while spending rose 0.2%

Reporting by Iain Gilbert at Sharecast.com