Inflation continued to rise in March, with the personal consumption expenditures (PCE) price index excluding food and energy increasing 2.8% from a year ago, according to a report from the Commerce Department on Friday (April 25). This figure exceeded the Dow Jones consensus estimate of 2.7%.

Including food and energy, the all-items PCE price gauge increased 2.7%, compared to the 2.6% estimate. On a monthly basis, both measures increased 0.3%, as expected, equaling the increase from February.

Despite the elevated price level, consumers continued to spend. Personal spending rose 0.8% on the month, slightly higher than the 0.7% estimate. Personal income increased by 0.5%, which is in line with expectations and higher than the 0.3% increase in February.

The personal savings rate fell to 3.2%, down 0.4 percentage points from February and 2 full percentage points from a year ago, as households dipped into savings to keep spending afloat.

The Federal Reserve, which targets 2% inflation, has been closely monitoring these figures as it contemplates its next monetary policy move. The Fed pays particular attention to the PCE because it adjusts for changes in consumer behavior and places less weight on housing costs than the more widely circulated consumer price index from the Labor Department.