Inflation picked up in August: Consumer prices rose 0.4% over the month, driven by shelter, food, and gasoline.
Annual inflation at 2.9%: Prices are now up nearly 3% over the past year, slightly higher than July’s 2.7%.
Food and shelter costs lead gains: Food prices climbed 0.5% in August, while shelter rose 0.4%, making them the biggest contributors.
Inflation ticked higher in August, with the Consumer Price Index (CPI) rising 0.4% on a seasonally adjusted basis, according to the U.S. Bureau of Labor Statistics. That marks an acceleration from July’s 0.2% increase, pushing annual inflation to 2.9%.
Shelter costs, one of the largest components of household budgets, rose 0.4% in August, making them the single biggest factor behind the monthly increase. Food prices climbed 0.5%, led by a 0.6% jump in grocery costs.
Fruits and vegetables surged 1.6%, with big spikes in tomatoes (+4.5%) and apples (+3.5%). Meat, poultry, fish, and eggs were also higher, up 1.0%.
Restaurant and dining prices rose at a slower pace, with food away from home rising 0.3%.
Energy prices edge higher
Energy prices, which have been volatile in recent months, increased 0.7% in August after falling in July. Gasoline prices rose 1.9% during the month, though they remain down 6.6% from a year earlier.
Electricity costs climbed 0.2%, while natural gas prices fell 1.6%. On a 12-month basis, energy overall is up just 0.2%, masking big differences between categories: natural gas surged 13.8% year-over-year, while gasoline declined.
Excluding food and energy, so-called “core inflation” rose 0.3% in August, matching July’s pace. Over the past 12 months, core inflation has stood at 3.1%.
Categories with the strongest price gains included airline fares (+5.9%), used cars and trucks (+1.0%), and apparel (+0.5%).
Medical care costs eased slightly, down 0.2% on the month, with declines in dental services and prescription drugs.
The annual 2.9% rate remains above the Federal Reserve’s 2% inflation target, though well below the peak levels seen earlier in the decade. Persistent housing costs and renewed energy price pressures may complicate the Fed’s efforts to steer inflation back toward its goal.