TORONTO -- North American stock markets were flat mid-afternoon Friday amid falling oil prices and reports showing tame inflation on both sides of the border.

The S&P/TSX composite edged 9.11 points higher to 15,212.72, while the loonie fell 0.68 of a U.S. cent to 81.23 cents.

In New York, markets were mixed in advance of the U.S. Memorial Day holiday weekend. The Dow Jones industrial average was down 22.83 points at 18,262.91, while the Nasdaq rose 3.09 points to 5,093.88 and the S&P 500 gave back 1.05 points to 2,129.77.

Energy stocks dropped 0.14 per cent on the TSX as the July crude contract slipped 80 cents to US$59.92 a barrel. The June gold contract fell 70 cents to US$1,203.40 an ounce.

In economic news, Statistics Canada reported the annual inflation rate slowed to just 0.8 per cent last month, its weakest reading since October 2013, with lower energy prices a major factor.

In the U.S., consumer prices rose slightly in April for the third straight month, suggesting that an improving economy could be setting the stage for the Federal Reserve to raise the benchmark short-term interest rate from the near-zero level where it has been for more than six years.

U.S. consumer prices edged up 0.1 per cent from the previous month but core inflation, which excludes volatile food and energy prices, climbed 0.3 per cent for the biggest gain in 15 months.

In a speech in Rhode Island on Friday, Federal Reserve chairwoman Janet Yellen said she expects the Fed to begin raising interest rates later this year if the job market improves and the U.S. central bank is confident that inflation will rise closer to its target rate.

But she cautioned that the economy is still facing a number of headwinds that could stall growth, including disappointing wage growth, a tepid housing recovery and global economic weakness.

But Yellen says because the Fed's interest rate moves take time to filter through the economy, she believes further improvements in the economy will likely make it prudent to start raising rates later this year.