US Inflation Rose to 3.4% in August as Gasoline Prices Surged

The Bureau of Labor Statistics released its August 2026 Consumer Price Index report at 8:30 a.m. ET on Friday, September 11, 2026, showing consumer prices rose 0.4% in August, up from a 0.1% increase in July, while the 12-month inflation rate was 3.4%. Behind the jump was a sharp rise in what Americans pay at the pump.

Key facts

Monthly CPI: up 0.4% in August (up from 0.1% in July)
Annual inflation rate: 3.4%
Gasoline: up 3.9% for the month, up 27.4% over the past year
Energy overall: up 2.1% for the month, up 16.3% over the past year
Food: up 0.1% for the month, up 2.7% over the past year
Shelter: up 0.3% in August (from 0.1% in July), up 3.0% over the past year
Core inflation (excludes food and energy): up 0.3% for the month, up 2.4% over the past year
Source: Bureau of Labor Statistics Consumer Price Index report, released Friday morning

Gasoline drives the August increase

Gasoline prices climbed 3.9% for the month alone and are up 27.4% over the past year, according to the BLS’s Consumer Price Index — the government’s main measure of what households pay for everyday goods and services. Energy prices overall rose 2.1% in August and are running 16.3% higher than a year ago. The agency said gasoline alone accounted for more than a third of the entire monthly increase in prices.

Food and shelter costs rise more slowly

Other costs moved more slowly. Food prices rose just 0.1% for the month and are up 2.7% over the past year, with food away from home rising 0.3%. Shelter — rent and other housing-related costs — rose 0.3% in August, up from 0.1% in July, and is up 3.0% over the past year.

Core inflation runs a bit hotter than expected

Strip out the volatile food and energy categories, and “core” inflation — the number economists and the Federal Reserve watch most closely for underlying price trends — rose 0.3% for the month and 2.4% over the past year. The monthly core reading came in 0.1 percentage point hotter than the consensus forecast, even though the annual figure landed close to where analysts had projected.

Fed faces pressure ahead of its meeting

Friday’s report was the last major inflation reading the Federal Reserve will see before its policy meeting later this month, where it will weigh whether to change interest rates. A separate report on wholesale prices, released a day earlier, had already been described in market commentary as unusually hot. Traders raised their bets on a quarter-point rate hike Friday morning, with market-tracking tools showing estimates ranging from about 86% to 90% — up sharply from earlier in the week — based on futures pricing tied to the Fed’s benchmark rate.

Warsh strikes a hawkish tone

Fed Chair Kevin Warsh, who took over in May after a close 54-45 Senate confirmation vote that ended Jerome Powell’s tenure, has struck a hawkish public tone in recent weeks — meaning he has emphasized fighting inflation over other concerns. In late-August remarks at Jackson Hole, he pointed to the PCE price measure, another gauge of inflation, saying 54% of its 199 components had risen more than 3% over the previous year. He argued that this showed recent softer inflation readings hadn’t reflected meaningful underlying improvement, and that the central bank’s focus needs to stay squarely on inflation.

Political pressure from Trump

President Trump has publicly pushed for lower interest rates, both during Powell’s tenure and now under Warsh — a political backdrop to a decision that remains the Fed’s to make on its own.

What happens next

The Fed’s coming rate decision will show how the central bank weighs Friday’s numbers: an annual inflation rate holding at its recent pace, a core reading a bit hotter than expected, and gasoline prices serving as the primary driver of the monthly increase last month. For now, the report gives drivers and grocery shoppers a clear read on the August price picture: gasoline was the primary driver, while shelter and core goods also contributed and food rose more modestly.