(Reuters) – The Federal Reserve is more likely to deliver a long-awaited rate cut in September after a U.S. Commerce Department report showed inflation made a bit of progress toward the Fed’s 2% goal last month and spending softened, traders expect.

After the data, traders priced in about a 53% chance of a rate cut in September, versus about 49% before the report. The report showed the core personal consumption expenditures price index, which the Fed uses to gauge underlying price pressures, rose 0.2% in April from March, following a 0.3% increase the prior month.

Consumer spending, which accounts for more than two-thirds of U.S. economic activity, increased by 0.2%, down from a 0.7% rise in March.

“The PCE data confirms price increases aren’t as sticky as feared, keeping hopes of at least one rate cut on the table,” said David Russell, global head of market strategy at TradeStation.

The inflation data still shows price pressures remain above the Fed’s 2% target, with the year-over-year rise in the PCE index measuring 2.7% in April, the same rate as in March.

Traders remained doubtful the Fed will cut rates more than once this year, with rate futures reflecting about a 45% chance of a second rate cut by year-end, compared with about 42% before the report.

(Reporting by Ann Saphir; editing by Philippa Fletcher and Nick Macfie)