US inflation rises to 3.4% in August as gasoline prices jump
Consumer prices rose 0.4% in August and 3.4% from a year earlier. Core inflation, which strips out food and energy, was 2.4%.
US consumer prices rose 0.4% in August 2026, according to the Bureau of Labor Statistics, lifting the annual inflation rate to 3.4%. The report was published on 11 September, five days before the Federal Reserve's policy decision.
The main numbers
- All items: +0.4% on the month, +3.4% on the year
- Core (excluding food and energy): +0.3% on the month, +2.4% on the year
- Energy: +2.1% on the month, +16.3% on the year
- Gasoline: +3.9% on the month, +27.4% on the year
- Shelter: +0.3% on the month, +3.0% on the year
- Food: +0.1% on the month, +2.7% on the year
An energy story, for now
The gap between headline inflation at 3.4% and core inflation at 2.4% shows where the pressure is coming from. Gasoline prices more than a quarter higher than a year ago reflect the jump in crude oil, with Brent trading above $100 a barrel in early September. Shelter, the largest single component of core inflation, rose at a steadier 3.0% annual rate, and food inflation was 2.7%.
Producer prices, published a day earlier, pointed the same way: final demand prices were up 5.4% over twelve months, with diesel fuel leading the rise.
Why the dollar watches CPI so closely
CPI is one of the few US releases that can move every dollar pair at once, because it feeds directly into expectations for Federal Reserve policy. Traders usually focus on the monthly change in core CPI, since it says more about underlying inflation than the headline number, which swings with energy prices.
This month the question for the Fed is whether an energy shock of this size starts to spread into other prices. The committee announces its decision on 16 September; see what traders are watching at the Fed meeting.
For a primer on the difference between headline and core inflation, see CPI explained.
Sources
Common questions
What was US inflation in August 2026?
The consumer price index rose 3.4% from a year earlier and 0.4% on the month, according to the Bureau of Labor Statistics.
What was US core CPI in August 2026?
Core CPI, which excludes food and energy, rose 0.3% on the month and 2.4% on the year.
Why is headline inflation higher than core inflation?
Energy prices. The energy index was 16.3% higher than a year earlier and gasoline 27.4% higher. Core inflation leaves out food and energy, so it rose less.
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