Inflation held at 2.5% for the year ending in February, the Bureau of Labor Statistics reported Friday in an update to the personal consumption expenditures index, which is the Federal Reserve’s preferred gauge.

The Federal Reserve’s key inflation measure rose more than expected in February while consumer spending also posted a smaller-than-projected increase, the Commerce Department reported Friday.

However, the Commerce Department announced Friday that the Fed's key inflation measure expanded more than expected in February, as the growth in personal consumption expenditures put the 12-month inflation rate at 2.8%. Economists surveyed by Dow Jones had been expecting numbers closer to 0.3% for PCE and only 2.7% for the inflation rate.