The U.S. economy got some good news on the inflation front Friday as fresh data saw the personal consumption expenditures (PCE) price index hit its lowest annual rate in May in over three years.

The PCE came in according to projections -- rising 0.1% from April's reading and up 2.6% from last year. The latter figure is actually down 0.2% from last month, according to data from the Commerce Department.

The reading marked the lowest PCE since March 2021, which signaled the first figure that exceeded the Federal Reserve's target of 2% inflation. The Fed responded with a series of interest rate hikes that remain in place.

Headline inflation, which includes the more volatile food and energy prices, also remained mostly flat in May at 2.6%. Economists hope the encouraging news will lead to a lowering of interest rates from their current 13-year highs.

Inflation