The U.S. Federal Reserve’s preferred measure of inflation dipped below 2% for the first time in three years in May, according to a government report released today.

At the same time, while personal incomes and consumer spending both grew in May, they did so a bit more slowly than expected.

The price index for personal consumption expenditures rose 0.5% in May compared to the prior month and 2.3% from a year earlier. Excluding food and energy, the “core” index rose 0.1% in May and 1.9% from a year earlier, the first reading below 2% since April, 2004.

The core PCE index is the Fed’s preferred benchmark for inflation. Some Fed officials say their “comfort zone” for inflation is 1% to 2%.

Personal income rose at a seasonally adjusted rate of 0.4% compared to the month before, the Commerce Department said today. Income decreased a revised 0.2% in April; originally, income for that month was seen 0.1% lower.

May personal consumption grew 0.5% compared to the month before. Spending had increased an unrevised 0.5% in April.

Economists had called for a 0.6% increase in personal income during May and a 0.7% climb in consumer spending.

Disposable personal income — income after taxes — rose by 0.4%, following a 0.3% decrease in April.

Spending on durable goods, those designed to last three years or longer, increased 0.4% in May, after dropping 0.6% the previous month. Non-durable goods spending surged 1.4%, after a 0.5% climb in April. Spending on services inched up 0.1%, following a climb of 0.8% in April.

Commerce reported personal saving as a percentage of disposable personal income was negative 1.4% in May, marking the 26th straight month the savings yardstick has showed red. It was negative 1.2% in April.