Consumer prices kept climbing in August, according to a Bureau of Labor Statistics report released Friday that lands just days before Federal Reserve officials decide whether to raise interest rates. The consumer price index rose a seasonally adjusted 0.4% for the month, pushing the 12-month rate to 3.4%, CNBC reported. Both figures matched the Dow Jones consensus estimate.
The underlying picture was a touch warmer than economists expected. Core CPI, which excludes volatile food and energy costs, increased 0.3% on the month — a tenth of a percentage point above forecast. The annual core rate held at 2.4%, in line with projections.
Energy Does the Heavy Lifting
Gasoline prices did much of the work. They jumped 3.9% in August and accounted for more than one-third of the overall index increase. The broader energy index rose 2.1% for the month and stood 16.3% higher than a year earlier, with the report pointing to escalating tensions in the Middle East as a source of pressure.
Food costs offered little relief, though the increase was modest. The food index edged up 0.1% as prices for food at home held flat. Measured over 12 months, food prices were up 2.7%.
Shelter and Vehicles Add to the Tally
Shelter costs, a stubborn component that had cooled over the previous two months, rose 0.3% in August. Transportation services climbed 0.5%. Vehicle prices also moved higher: used cars and trucks were up 0.4%, while new vehicle prices gained 0.3%. Taken together, the report described gains that appeared broad-based across the index rather than confined to a handful of categories.
That breadth matters for the Fed. Policymakers have been watching for evidence that inflation is settling back toward their 2% target, and a monthly core reading that came in above expectations gives them something to weigh against the recent moderation in shelter costs. The August CPI is the last major inflation reading officials will receive before their policy meeting next week, which concludes Wednesday with a vote on the key interest rate.
Investors and economists have been split on whether the central bank will move. A headline number in line with forecasts, paired with a core reading that ran slightly hot, leaves the decision genuinely open heading into the meeting.
This is a developing story, and further updates are expected.
Source: www.cnbc.com — https://www.cnbc.com/2026/09/11/cpi-inflation-report-august-2026.html
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