The Federal Reserve's preferred measure of underlying inflation, the so-called core personal consumption expenditures price index, rose 0.3% from May and advanced 2.8% on an annual basis. Inflation-adjusted consumer spending edged up last month after declining in May and weekly jobless claims rose less than expected to 218.

The Federal Reserve’s preferred measure of underlying inflation increased in June at one of the fastest paces this year while consumer spending barely rose, underscoring the dueling forces dividing policymakers over the path of interest rates.