Iran War-Driven Energy Shock Keeps US Inflation Elevated

US inflation remained stubbornly high in August due to ongoing energy price shocks from the war in Iran. The Personal Consumption Expenditures (PCE) price index, the Federal Reserve's preferred inflation gauge, rose 0.3% from July, bringing the annual rate to 3.4%, unchanged from the previous month.

The core PCE price index, which excludes volatile food and energy prices, also rose 0.2% from July, remaining at an annual rate of 3% for a third consecutive month.

Despite high inflation, consumer spending remained resilient, increasing by 0.6% in August, the strongest monthly gain in over a year.