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U.S. inflation in August 2026 at 3.4%, with no increase
Inflation in the USA is still not letting up, but the August reading was no surprise
The August CPI reading in the USA showed that price pressure remains elevated, although the data were no worse than expected. In August 2026, CPI inflation came in at 3.4% y/y, the same as in July. That means prices in the United States are still rising faster than the Fed‘s target, which has stood at 2% for quite some time.
Economists had expected exactly 3.4%, while the Fed‘s Cleveland model pointed to 3.38%. The reading therefore matched market estimates. At the same time, this was the 66th consecutive month that inflation in the USA remained above the central bank’s target.
On a month-on-month basis, the CPI rose by 0.4% m/m, after 0.1% m/m in July. Previous months brought more volatile readings, and fuels and energy still had a big impact on the result. It is worth remembering that core inflation, the measure excluding food, fuels and energy, came in at 0.3% m/m and 2.4% y/y in August.
That is still above the Fed‘s target, although it is the lowest level since March 2021. From the perspective of consumers in the USA, it means the cost of living remains under pressure, and a quick return of inflation to 2% is not visible at the moment.
August data showed particularly strong gains in fuel prices. Gasoline rose by 3.9% m/m, heating oil by 10.1% m/m, and fuels were 28% more expensive than a year earlier. Electricity prices, by contrast, fell by 0.2% m/m, although they were still up 3.8% year on year.
Food prices remained stable, unchanged on the month, but up 2.2% over the past 12 months. Goods excluding food and energy rose by 0.7% y/y, while services increased by 3.0% y/y. That shows inflation in the USA is not limited to fuel prices alone.
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