US Inflation Rate Jumps Back Above Target as Gas Prices Soar

US consumer prices rose 0.4% in August, matching forecasts, according to the Labor Department's estimate on September 11.

The increase was driven by a spike in gas prices, which jumped 3.9%, as the ongoing Iran war further limited global oil supply.

This marks the second consecutive month that overall inflation has risen above workers' paychecks, with prices increasing 3.4% over the year and wages up 3.1% over the same period.

Year-over-year inflation had declined from a peak of 9.1% in 2022 to as low as 2.4% at the start of 2026 but jumped back up to 3.5% in May and has remained above the central bank's 2% annual target since then.

The Federal Reserve's preferred measure of inflation, the Personal Consumption Expenditures price index, also remains above the target, fueling speculation that interest rates may be raised at the Fed's next meeting on September 16 to combat rising prices and stimulate job growth.