The U.S. inflation rate climbed in August, according to new data from the Bureau of Labor Statistics.
According to new data released on Thursday, the Consumer Price Index (CPI) increased to 2.9% in the 12-month period ending in July. It was at 2.7% for the 12-month period ending in June and July.
The inflation rate is 0.5 percentage points higher than May's rate of 2.4%, and 0.6 percentage points higher than April's consumer price index, which marked the lowest year-over-year inflation rate since 2021.
The extent to which President Donald Trump's tariff policies have contributed to inflation remains unclear. The inflation rate on items other than food and energy increased to 3.1% for the year ending in August.
Last week, the Budget Lab at Yale University said Trump's tariffs would raise prices by almost 1.7% in the short run, costing the typical middle-class household more than $2,300 per year. Those figures have fluctuated as President Trump continues shifting tariff rates on various nations.
The Consumer Price Index weighs the costs of goods based on their importance; items like food, shelter, and energy tend to be weighted more heavily.
Airline fares, used cars and trucks, apparel, and new vehicles saw price increases in August. Many experts said apparel could especially be vulnerable to import taxes, given that most of the clothes worn by Americans are imported.
Over the last decade, prices have generally increased at a rate of 3.5% per year. Over the last 20 years, consumer inflation has typically risen by 3.3% annually. The Federal Reserve, however, has aimed to keep annual inflation at approximately 2%.
The new data could help determine whether federal interest rates should be lowered. The Federal Reserve aims to keep inflation at around 2% while also maintaining robust hiring. As the BLS' recent job numbers showed a softening job market, some are expecting the Federal Reserve to lower interest rates at its meeting next week.
