U.S. consumer inflation held at 3.4% in August, unchanged from July, as sharply higher gasoline and fuel-oil prices offset slower increases in housing and food costs.
The Consumer Price Index rose 0.4% from July, the largest monthly increase in three months, according to data released Friday by the U.S. Bureau of Labor Statistics. The annual reading matched the previous month’s 3.4%. July’s CPI had increased just 0.1% month over month.
Energy remained one of the strongest sources of price pressure. Gasoline prices were 27.4% higher than a year earlier, accelerating from a 24.6% increase in July, while fuel oil prices jumped 52% year over year, compared with 39.1% previously.
Gasoline increased 3.9% in August alone and accounted for more than one-third of the monthly rise in the overall CPI. By contrast, utility natural gas prices declined 1.1% and electricity prices fell 0.2%.
The latest figures extend the sharp change in U.S. energy inflation seen since earlier this year. Gasoline prices had already been rising 28.4% year over year in April as energy markets adjusted to supply disruptions.
Shelter and Food Inflation Ease
Price pressures moderated in several major household categories.
Shelter inflation slowed to 3.0% year over year from 3.2% in July, while food inflation eased to 2.7% from 3.0%. On a monthly basis, shelter costs increased 0.3% and food prices edged up 0.1%.
Other categories recorded larger monthly increases. Communication prices rose 2.3%, airline fares advanced 2.7%, education costs increased 0.8%, and used cars and trucks rose 0.4%.
Core Inflation Falls to Lowest Since March 2021
Underlying inflation continued to moderate on an annual basis despite a stronger monthly reading.
The core CPI, which excludes volatile food and energy prices, increased 0.3% in August, compared with 0.2% in July.
Over the past 12 months, however, core inflation slowed to 2.4% from 2.5%, its lowest annual rate since March 2021. The July core reading of 2.5% had already marked a further easing in underlying inflation pressures.
The combination of 3.4% headline inflation and 2.4% core inflation highlights the growing role of energy prices in the current inflation picture. While underlying price pressures have continued to moderate, higher fuel costs are keeping the overall inflation rate elevated.
The August report arrives just days before the Federal Reserve’s September 15-16 policy meeting, making the split between easing core inflation and persistent energy-driven headline inflation an important part of the economic backdrop policymakers will assess.
