The Federal Reserve's favored measure of inflation slowed last month, providing some much-needed relief as it attempts to balance tackling higher prices with banking concerns.

The annual personal consumption expenditures price index (PCE) slowed to 5 percent in February from 5.3 percent a month earlier, with increases recorded in the cost of food, energy and goods, according to data released Friday by the Bureau of Economic Analysis.

But core PCE, which excludes volatile food and energy costs, only slowed slightly to record an annual increase of 4.6 percent in February, down from 4.7 percent in January.

While the decline in headline inflation is positive news for the Fed, it shows price rises remain elevated and well above the US central bank's long-term target of two percent.

The Fed has hiked interest rates nine times since last March in a bid to bring down rising inflation.

At its recent rate decision, Fed chair Jerome Powell suggested the central bank may only raise rates once more and then bring its current hiking cycle to a halt.

On a month-to-month basis, the PCE price index rose by 0.3 percent from January to February, half the monthly increase recorded a month earlier.