US Consumer Prices Accelerate 2.9% in August, Pressuring Fed Ahead of Rate Decision

Americans saw the Consumer Price Index climb 0.4% in August and 2.9% year-over-year, driven by higher housing, food and energy costs, the Bureau of Labor Statistics reported today in Washington.

The uptick marks the fastest annual inflation rate since early 2025 and underscores persistent price pressures just days before the Federal Reserve’s September policy meeting.

Key Figures

• CPI (all items) increased 0.4% seasonally adjusted in August, up from 0.2% in July, and rose 2.9% over the past 12 months.
• Core CPI, excluding food and energy, gained 0.3% month-to-month and 3.1% year-over-year, matching July’s pace.

Sector Details

• Shelter: The largest contributor, with prices up 0.4% in August and 3.6% over the last year.
• Food: Climbed 0.5% for the month-0.6% for at-home and 0.3% for away-from-home dining-and 3.2% annually.
• Energy: Advanced 0.7% in August as gasoline jumped 1.9%, with a 0.2% year-over-year gain.

Implications for Monetary Policy

Investors and policymakers alike are eyeing the data for clues on the Fed’s next move. Despite headline inflation remaining above the central bank’s 2% target, markets still anticipate a quarter-point rate cut at the Fed’s meeting next week. The persistence of core price gains, however, may prompt the Fed to adopt a more cautious pace of easing.