Consumers paid more for gasoline, shelter, and airline fares, while grocery prices were unchanged
of ConsumerAffairsConsumer prices rose 0.4% in August, accelerating sharply from Julys 0.1% increase.
Gasoline prices jumped 3.9% and accounted for more than one-third of the overall monthly increase in the Consumer Price Index.
Annual inflation held at 3.4%, while core inflation eased slightly to 2.4% over the last 12 months.
Inflation picked up speed in August, largely because of a sharp increase in gasoline prices that put additional pressure on household budgets.
The Consumer Price Index (CPI) rose a seasonally adjusted 0.4% in August, according to the Bureau of Labor Statistics (BLS). That was a significant acceleration from the 0.1% increase recorded in July.
Over the last 12 months, consumer prices increased 3.4%, unchanged from the annual inflation rate in July.
Energy was one of the biggest reasons inflation accelerated. Gasoline prices rose 3.9% in August and accounted for more than one-third of the increase in the overall CPI. The broader energy index increased 2.1%.
The longer-term increase in energy costs has been even more dramatic. Energy prices were 16.3% higher than a year earlier, while gasoline was up 27.4%. Fuel oil prices were 52% higher than in August 2025.
For consumers, those increases can have effects beyond the gas pump. Higher fuel prices raise transportation and distribution costs for businesses, which can eventually find their way into prices for food and other goods.
Grocery prices offer some relief
There was better news at the supermarket. Food prices increased just 0.1% during August, while prices for food purchased for use at home were unchanged.
But individual grocery categories moved in different directions. Egg prices rose 2.9% for the month, dairy products increased 0.3%, and nonalcoholic beverages rose 0.2%.
Fruits and vegetables fell 0.4%. Lettuce prices dropped another 6.2% after plunging 16.4% in July.
Eating out continued to get more expensive. Prices for food away from home rose 0.3% in August and were 3.4% higher than a year ago. Full-service restaurant meals were up 3.5% over the last 12 months.
Overall grocery prices were 2.2% higher than a year ago, compared with the 3.4% increase in the overall CPI.
Core inflation shows some improvement
The closely watched "core" CPI, which excludes volatile food and energy prices, increased 0.3% in August after rising 0.2% in July.
More encouragingly, core prices increased 2.4% over the last 12 months, down from 2.5% in July. That suggests some underlying inflation pressures continued to moderate even as higher energy prices pushed the headline monthly number higher.
Housing costs remained a source of inflation. Shelter prices rose 0.3% in August and were 3.0% higher than a year earlier. Both rent and owners' equivalent rent increased 0.2% during the month.
Travelers also encountered higher prices. Airline fares jumped 2.7% in August, while lodging away from home increased 2.4%. Airline fares were a striking 23.4% higher than a year earlier.
There were a few pockets of relief. Medical care prices declined 0.2% for the month, while motor vehicle insurance fell 0.8%. Used car and truck prices, however, increased 0.4%, and new vehicle prices rose 0.3%.
What it means for consumers
The August report presents a mixed inflation picture. Underlying inflation continued to ease on a year-over-year basis, and grocery prices were stable during the month. But consumers are once again confronting rapidly rising energy costs.
Gasoline is particularly important because consumers feel the increase immediately every time they fill their tanks. Higher fuel costs can also ripple through the economy by raising the cost of moving goods.
With annual inflation remaining at 3.4%, the latest CPI report also shows that inflation remains above the Federal Reserve's 2% long-term target, although the Fed measures that target using a different inflation gauge.
Photo By CNET
Posted: 2026-09-11 13:09:32
