US Inflation Accelerates as Gas Prices Soar Amid Middle East Tensions

US inflation accelerated in August as gas prices spiked due to renewed fighting in the Middle East. The consumer price index rose 3.4% last month compared with a year ago, the same as in July. However, on a monthly basis, inflation quickened, with costs jumping 0.4% from July to August.

The Labor Department reported that prices for appliances, car repairs, and wireless phone services also jumped last month. Economists worry that more expensive fuel can spill into other parts of the economy, such as higher shipping costs for groceries and other goods delivered by truck.

The Federal Reserve is under pressure to boost the benchmark interest rate at a meeting next week. Chair Kevin Warsh signaled that interest rates can remain on hold only if disinflation continues, but today's August report did not deliver that. Kathy Bostjancic, chief economist at Nationwide, said 'this is not one and done,' as tensions in the Middle East are unlikely to settle down soon.