Consumer price increases accelerated last month, the latest sign that inflation's steady decline over the past two years has stalled.

According to the Federal Reserve's preferred inflation gauge, consumer prices rose 2.3% in October from a year earlier, the Commerce Department said Wednesday. That is up from just 2.1% in September, though it is still only modestly above the Fed's 2% target.

Yet excluding the volatile food and energy categories, so-called “core” prices also picked up, climbing 2.8% last month from a year earlier, up from 2.7% in September. Economists closely watch core prices because they typically provide a better read on where inflation is headed.

Inflation has fallen sharply since it peaked at 7% in mid-2022, according to the Fed's preferred measure. Yet yearly core inflation has been stuck at 2.8% since February. Price increases have remained elevated in services, including apartment rents, restaurant meals, and car and home insurance.

Wednesday's Personal Consumption Expenditures report also underscored that Americans' incomes and spending remained healthy, a key reason the economy has kept growing this year despite widespread fears of a slowdown. Incomes grew 0.6% from September to October, faster than economists had expected, while consumer spending rose by a solid 0.4% last month.