Energy Costs Keep U.S. Inflation Elevated

U.S. consumer prices increased 0.4% month-on-month in August 2026, accelerating from a 0.1% rise in July. Annual headline inflation remained unchanged at 3.4%.

Energy Prices Drive Monthly CPI Higher

Energy costs were a major contributor to the August increase. Gasoline prices jumped 3.9%, accounting for more than one-third of the overall monthly CPI gain. The broader energy index climbed 2.1%.

Shelter costs increased 0.3%, continuing to put pressure on consumer prices. Food prices edged up 0.1%, while the cost of food away from home rose 0.3%.

Core Inflation Eases Annually

Core CPI, which excludes volatile food and energy prices, increased 0.3% month-on-month. Higher prices were recorded for communication, lodging, airline fares, education, and used cars and trucks. Meanwhile, medical care and motor vehicle insurance costs declined.

On an annual basis, core inflation slowed slightly to 2.4% from 2.5%, indicating that underlying price pressures are gradually easing.

However, energy prices remained 16.3% higher year-on-year, keeping headline inflation elevated. The August figures suggest that while core inflation continues to moderate, persistent energy costs remain an important inflationary risk for the U.S. economy.

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