Inflation Holds Steady Amid War-Driven Energy Shock

US inflation data for August shows prices rose by 0.3% from July, bringing the annual rate to 3.4%, unchanged from the previous month.

The Personal Consumption Expenditures price index is the Federal Reserve's preferred gauge of inflation, and it remained elevated despite some methodological changes made by the Commerce Department to several key categories.

However, excluding volatile food and energy prices, the core PCE price index rose 0.2% from July, staying at a downwardly revised annual rate of 3% for a third-straight month.

Economists had expected some cooling in inflation due to these changes, but instead prices picked up on a monthly basis as fuel and energy costs shot higher due to the ongoing war in Iran.