US Inflation Accelerates: August CPI Rises 0.4% as Core Inflation Holds Steady

Lead The U.S. Consumer Price Index climbed 0.4% in August from July, driven by higher shelter, food and energy costs, marking a 2.9% increase year-over-year, the Bureau of Labor Statistics reported Thursday in Washington.

Nut Graf August’s hotter-than-expected inflation print underscores persistent price pressures ahead of the Federal Reserve’s September policy meeting, reinforcing uncertainty over the timing of the next rate cut.

Market Highlights

• Shelter costs led the monthly gain, rising 0.4% as rental and housing prices continued upward pressure.
• Food prices increased 0.5% overall, with “food at home” up 0.6% and “food away from home” up 0.3%.
• Energy costs rose 0.7%, led by a 1.9% jump in gasoline prices.

Core Inflation and Components

• Core CPI (excluding food and energy) rose 0.3% in August and 3.1% over the past 12 months, matching July’s annual pace.
• Used cars and trucks prices increased 1.0%, while new vehicles edged up 0.3%.
• Medical care services eased slightly, dipping 0.1% for the month, though still 4.2% higher year-over-year.

Implications for Fed Policy Investors will scrutinize this report ahead of the Federal Open Market Committee meeting on September 16-17, where policymakers must weigh lingering inflation against a cooling labor market and broader economic growth.

Outlook With annual inflation remaining above the Fed’s 2% target, the central bank faces a delicate balance between supporting the economic recovery and preventing a resurgence of price pressures. Continuous upward trends in shelter and core services will be key indicators for future rate decisions.