News & Insights

In August, consumer prices increased 0.4% over the month and 2.9% over the year, up from the 2.7% annual rise in July. Core CPI, which excludes more volatile energy and food prices, rose 0.3% over the month and 3.1% over the year, slightly higher than the 3.0% 12-month increase in the month prior.

Energy costs increased 0.7% over the month in August, after declining 1.1% in July, and ticked up 0.2% over the year. Within the energy index, gasoline prices jumped 1.9% from July, after plunging 2.2% the month prior, and declined 6.6% from August 2024. Meanwhile, utility (piped) gas prices dropped 1.6% over the month, but surged 13.8% over the year.

In August, food prices rose 0.5% over the month, after staying the same as July, with prices for food away from home increasing 0.3%. Over the year, food prices advanced 3.2%, with food away from home jumping 3.9%. Meanwhile, prices for food at home climbed 0.6% from July and 2.7% from August 2024. All six indexes for major grocery store food groups increased in August.

The shelter index grew 0.4% over the month and 3.6% over the year, a significant driver in the headline increase, while also continuing its downward 12-month trend since peaking at an 8.2% annual gain in March 2023. Meanwhile, prices for used cars and trucks soared 1.0% over the month and 6.0% over the year. Relatedly, motor vehicle maintenance and repair jumped 2.4% from July and 8.5% from August 2024.

Both the headline and core inflation rate have ticked up in recent months amid an increase in core goods prices, but likely not enough to deter Federal Reserve officials from cutting their interest rate target later this week, particularly since weakness in the labor market has increased notably. Therefore, markets anticipate that the Federal Open Market Committee will lower its interest rate target by 25 basis points at its meeting this week, with a growing segment of the market calling for a 50 basis point cut.