August CPI: Inflation Holds at 3.4 Percent as Gasoline Runs 27 Percent Above Last Year
Prices rose 0.4 percent in August and 3.4 percent over the year. Core inflation eased to 2.4 percent, but energy is up 16.3 percent, so your own rate depends on how much you drive.
The Bureau of Labor Statistics reported on September 11 that the Consumer Price Index rose 0.4 percent in August on a seasonally adjusted basis, after a 0.1 percent gain in July. Over the past 12 months prices are up 3.4 percent, the same pace as July and down from the 3.8 percent reading we covered in April. Strip out food and energy and the picture is calmer: core CPI rose 0.3 percent for the month and 2.4 percent for the year, down from 2.5 percent.
The gap between those two numbers is the story of 2026. Energy prices are up 16.3 percent from a year ago, and gasoline alone is up 27.4 percent. BLS said gasoline rose 3.9 percent in August and accounted for more than a third of the month's overall increase.
Where prices rose, and where they fell
The oil shock shows up well beyond the pump. Fuel oil is up 52 percent over the year and airline fares 23.4 percent. Shelter, the heaviest item in the index, rose 3.0 percent, with rent of a primary residence up 2.7 percent. Food rose 2.7 percent overall: 2.2 percent at the grocery store and 3.4 percent at restaurants. Electricity is up 3.8 percent and piped natural gas 4.4 percent.
A few categories got cheaper. Used cars and trucks are down 2.3 percent from a year ago, motor vehicle insurance is down 5.1 percent, and medical care commodities, which include prescription drugs, are down 2.7 percent.
Why your inflation rate isn't 3.4 percent
The CPI tracks an average basket, and gasoline carries only about 3.8 percent of its weight. A household that drives more than average feels far more than 3.4 percent. Take a commuter who spent $250 a month on gas last August: at a 27.4 percent increase, the same driving now costs about $319, roughly $820 more over a year. A household that works from home, rents and rarely flies lives closer to the 2.4 percent core rate. Shelter carries about 35 percent of the index's weight, so a renter whose lease reset this year can land well above or below the average depending on the local market.
What to do with this
Price your own basket. Our inflation calculator shows what a dollar from an earlier year buys today, and the same logic works line by line: multiply last year's spending on gas, groceries and rent by each category's change to see your own number. If your raise this year came in under 3.4 percent, your paycheck lost ground to the average; if you drive a lot, it lost more.
Make sure your cash is earning more than inflation. With the Fed raising rates again (see our September 16 explainer), savings yields have room to rise, and our rates guide explains where to compare them.
Mark October 14. BLS publishes September CPI at 8:30 a.m. Eastern that day, and the Social Security Administration uses third-quarter CPI-W to set the 2027 cost-of-living adjustment. CPI-W was up 3.5 percent over the year in August.
Your own number depends on your mix of bills. Our personal inflation rate calculator applies these category changes to what you actually spend, and our personal inflation guide works through the math with three sample households.