U.S. annual inflation holds at 3.4% in August

U.S. inflation held at 3.4% over the twelve months to August, but prices rose more quickly from one month to the next. The Bureau of Labor Statistics report published on September 11 shows a seasonally adjusted monthly increase of 0.4%, following 0.1% in July. [1]

An uneven increase

Gasoline played a major role: prices rose 3.9% in August and accounted for more than one-third of the monthly increase in the overall index. By contrast, food-at-home prices were unchanged over the month. A national average can therefore bring together very different movements across spending categories. [1]

The core index excludes food and energy, two often volatile components, to examine the underlying trend. This does not mean those expenses disappear from household budgets; their changes remain included in the overall index. [3]

What the national figure measures

The BLS emphasizes that its basket represents average consumption. A household that spends a larger share of its income on fuel, housing or particular services may experience a different change. The published rate is therefore a collective reference point, not an exact description of every family’s circumstances. [3]

Stable annual inflation does not mean prices have returned to an earlier level. A positive rate of 3.4% means the index remains higher than a year earlier. Monthly and annual changes answer different questions over different periods. [3]

A market session provides a different indicator

Wall Street ended Friday higher: the S&P 500 gained 0.9%, while the Dow Jones and Nasdaq rose about 1%. The S&P 500 nevertheless fell 0.8% over the week, according to Associated Press. One positive session is not enough to characterize the weekly trend or to conclude that pressures on households have disappeared. [2]