Inflation Rises as Gas Prices Soar Amid Middle East Conflict

US inflation picked up in August due to rising gas prices caused by ongoing conflict in the Middle East, according to a new report from the Labor Department. The consumer price index rose 3.4% compared to a year ago, matching July's pace, and increased 0.4% from July.

Gasoline prices jumped 3.9% just from July to August, leaving gas prices more than 27% higher than a year earlier, at $4.30 per gallon nationwide. The rising cost of fuel is likely to spill into other parts of the economy, including diesel prices that have hit record highs above $6 a gallon.

Economists worry about the impact on consumers and businesses, with many feeling the pinch of higher costs. Federal Reserve officials are also concerned, as inflation remains stubbornly elevated more than five years after prices soared as the economy emerged from the pandemic.