The US Federal Reserve's preferred inflation gauge held relatively steady in November, government data showed on Thursday, remaining above the central bank's target as officials mull the right time for further interest rate cuts.

The personal consumption expenditures (PCE) price index came in at 2.8 percent in November on a year-on-year basis, up from 2.7 percent in October, the Department of Commerce said.

From the preceding month, the rate was 0.2 percent in both October and November.

But this is not the most up-to-date snapshot of the world's biggest economy, as the report contained numbers for both months delayed by a lengthy government shutdown in late 2025.

Nonetheless, the data will likely be considered as the Fed gathers for its policy meeting next week.

After three consecutive interest rate cuts last year, bringing interest rates to a range between 3.50 percent and 3.75 percent, the US central bank is widely anticipated to keep levels unchanged in January.

This is because policymakers would be inclined to assess the impact of their earlier rate reductions, as President Donald Trump's tariffs filter through supply chains – among other pressures.

The Fed balances between inflation risks and the jobs market's health as it adjusts the benchmark lending rate, and the current PCE price index level remains above its 2.0 percent long term target.

Excluding the volatile food and energy sectors, the PCE price index was still up 2.7 percent from a year ago in October, followed by 2.8 percent in November. (AFP)