August Inflation Accelerates as Gas Prices Soar to Record Highs

The US inflation rate accelerated in August due to rising gas prices and a jump in other costs. The Consumer Price Index rose 3.4% last month compared with a year ago, matching July's rate.

However, the pace of inflation quickened from the previous month as prices jumped 0.4%, quadrupling the 0.1% increase seen in July. Inflation has remained stubbornly elevated for over five years since the pandemic.

Economists worry that higher fuel costs could spill into other parts of the economy, pushing up shipping and food prices. Diesel prices have hit record highs above $6 a gallon, while airline tickets rose 2.7% in August and are now 23% more expensive than last year.

The Federal Reserve is under pressure to boost interest rates next week, which could lead to higher mortgage and auto loan costs. Fed Chair Kevin Warsh and other officials have signaled they need to see continuing disinflation before leaving rates unchanged.