US Inflation Rate Stays Elevated Amid War-Driven Energy Shock

The US inflation rate remained stubbornly elevated in August, driven by a war-driven energy shock that continued to ripple through the economy and Americans' pocketbooks.

The Personal Consumption Expenditures 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, according to data from the Commerce Department.

Inflation picked up on a monthly basis as fuel and other energy prices shot higher due to the war in Iran, but excluding volatile food and energy prices, the core PCE price index rose only 0.2% from July, remaining at an annual rate of 3% for a third consecutive month.

Despite stubborn inflation, consumer spending remained resilient, with inflation-adjusted spending increasing by 0.6% in August, the strongest monthly increase in over a year.