US CPI Report Comes Broadly in Line with Forecasts

The annual inflation rate in the US steadied at 3.4% in August 2026, the same as in July and in line with forecasts. Gasoline prices rose 27.4% yoy, slightly more than 24.6% in July and fuel oil prices increased 52%, compared with 39.1% previously. On the other hand, inflation eased for shelter, to 3% from 3.2%, and for food to 2.7% from 3%. On a monthly basis, the CPI rose 0.4%, the most in three months, also matching forecasts. Gasoline rose 3.9% in August, accounting for over one third of the monthly increase while natural gas (-1.1%) and electricity (-0.2%) fell. Food edged up 0.1% while shelter rose 0.3%. Other increases were also seen for communication (2.3%), airline fares (2.7%), education (0.8%) and used cars and trucks (0.4%). Meanwhile, core CPI rose 0.3% on the month, above 0.2% in July and forecasts of 0.3%. The annual rate however, slowed to 2.4%, the lowest reading since March 2021, from 2.5%, as expected.

The annual US inflation rate is expected to have held steady at 3.4% in August 2026, matching the July reading. On a monthly basis, CPI is forecast to rise 0.4%, the strongest increase in three months, following a 0.1% gain in July. Gasoline prices are expected to have climbed nearly 3%, while grocery prices are also projected to rebound. Airfares are likely to remain elevated amid higher fuel costs, while housing costs are expected to continue showing signs of softness. Meanwhile, core CPI, which excludes food and energy, is expected to rise 0.2% mom, matching July’s increase, and 2.4% yoy, which would mark the lowest reading since March 2021, down from 2.5% in July. Overall, inflation is expected to remain well above the Fed’s 2% target.

The annual inflation rate in the US slowed for a second consecutive month to 3.4% in July 2026, from 3.5% in June, in line with expectations. Inflation moved further below the 2023 high of 4.2% reached in May, as the impact of the energy shock caused by the war with Iran continued to ease. Gasoline prices rose 24.6% yoy, down from 26.7% in June, while fuel oil prices increased 39.1%, compared with 42.9% previously. Inflation also eased in shelter, to 3.2% from 3.3%, while food inflation remained unchanged at 3%. On a monthly basis, the CPI rose 0.1% as expected, rebounding from a 0.4% decline in June. The index for shelter rose 0.1%, accounting for roughly two-thirds of the monthly increase. Food also went up 0.1%. In contrast, gasoline prices were down 2.9%. Meanwhile, core consumer prices went up 0.2%, following a flat reading in June, while the annual core inflation rate eased to 2.5% from 2.6% in the previous month, matching forecasts.