US Inflation Set to Accelerate on Rising Energy Prices

The US annual inflation rate is expected to accelerate to 3.6% in September 2026, up from 3.4% in each of the previous two months, driven primarily by rising energy prices. On a monthly basis, the CPI is forecast to increase by 0.6%, marking its largest gain in five months, as gasoline prices are expected to rise by more than 7%, while food prices are also projected to edge higher. Meanwhile, annual core inflation is expected to tick up to 2.5% from 2.4%, while monthly core CPI inflation is forecast to moderate to 0.2% from 0.3%, suggesting that underlying price pressures remain relatively contained. Airline fares likely continued to rise amid higher jet fuel costs, while rents are expected to post moderate increases. Goods prices likely edged up only marginally as the impact of tariffs gradually waned.

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 0.2%. The annual rate however, slowed to 2.4%, the lowest reading since March 2021, from 2.5%, in line with expectations.

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.