US consumer prices rose 3.4% in the 12 months to August 2026, unchanged from July, as energy price gains offset continued easing in core categories. The Bureau of Labor Statistics released the data on 11 September.
Core's steady decline
The more closely watched core measure — which excludes food and energy — fell to 2.4%, down from 2.6% in July and its lowest reading since March 2021. The decline was broad-based: used cars and trucks fell 1.2% on the month, airfares dropped 1.6%, and medical care services eased for the fourth consecutive month. This pattern of goods deflation and services moderation is exactly what the Federal Reserve has been waiting to see.
Shelter: still elevated, still slowing
Shelter inflation — which carries a roughly 36% weight in CPI — came in at 5.0%, down from 5.3% in July and well below its 2023 peak above 8%. Economists broadly expect shelter to keep disinflating as new lease contracts, signed at lower rents, gradually work their way into the index. This is a textbook example of a base effect working in reverse — the comparison periods were set when rents were spiking, so as those periods roll off, the annual rate will fall mechanically.
Shelter's 36% basket weight means that even a slow decline in this component has a large impact on the overall rate. If shelter continues toward 3.5% by year-end, it alone could push core CPI close to 2%.
Energy lifted the headline
Energy prices rose 5.6% vs a year ago, up from 4.1% in July. Petrol (gasoline) prices increased 3.4% on a monthly basis in August, contributing roughly 0.3 percentage points to the overall rate — nearly all of the difference between the headline (3.4%) and core (2.4%) readings. The contribution from energy is the mirror image of what happened in the euro area and UK: the same global oil market dynamics pushed headline rates above core in all three economies simultaneously.
For a full comparison of how August's data looked across the euro area, UK and US, see our cross-country analysis.